China's Tsinghua offers US$23b to buy US chipmaker Micron: WSJ

Tsinghua Unigroup Ltd., China's state-owned chip designer, offered to buy Micron Technology Inc. for US$23 billion (S$31.3 billion), the Wall Street Journal reported.
Tsinghua Unigroup Ltd., China's state-owned chip designer, offered to buy Micron Technology Inc. for US$23 billion (S$31.3 billion), the Wall Street Journal reported.PHOTO: REUTERS

TOKYO (REUTERS, BLOOMBERG) - Tsinghua Unigroup Ltd., China's state-owned chip designer, offered to buy Micron Technology Inc. for US$23 billion (S$31.3 billion), the Wall Street Journal reported.

If it goes ahead, the deal would be the biggest Chinese takeover of a US company.

Tsinghua offered US$21 per share for Micron, which is at a 19.3 per cent premium to the stock's close on Monday, the Journal said, citing a person familiar with the matter.

Micron and Tsinghua Unigroup were not immediately available to comment on the report.

Micron makes both dynamic random access memory chips, used mostly in personal computers, and NAND memory chips for storing music, pictures and other data on smartphones, cameras and other mobile devices.

Acquiring Micron's cutting-edge memory manufacturing technology would be a major advance for China's modest but improving chip industry. The country has no major memory makers.

Billionaire hedge fund manager David Einhorn said in an investor letter on Monday that Micron Technology would be worth more than Netflix Inc within the next few years. Netflix was worth US$42.9 billion at the close on Monday.

But Micron on June 26 reported its first revenue decline in more than two years on weakening demand for its dynamic random access memory, or DRAM, chips used in personal computers. The company is expanding its offerings to include memory for smartphones and servers and another type of chips used as storage in mobile devices and computers.

Micron shares fell 18 per cent on the day after it reported the revenue decline, the sharpest single-day drop since December 2008.

The stock is down 50 per cent this year and Micron has a market value of US$19 billion as of Monday.