Micron dishes out $680m bid for Lexar
Lends a helping NAND
Memory chip maker Micron has laid out close to $680m in stock to buy Lexar Media.
The acquisition would give Micron a leg up in the NAND flash market and potentially improve Lexar's competitive position against SanDisk. Lexar investors appeared most receptive to the idea, sending shares up 22 per cent - just past the premium Micron agreed to pay for the company. Meanwhile, Micron shares lost 2 per cent, and SanDisk shares sank 6 per cent.
SanDisk currently has a solid deal in place with Toshiba to source NAND memory. This has helped SanDisk lower costs of its flash-memory cards, which slot into all kinds of devices such as cameras, cell phones, and MP3 players.
Should the acquisition go through, Lexar could get its NAND memory right from Micron instead of dealing with current supplier Samsung. This would help Lexar battle SanDisk.
"Through this acquisition, we expect to better align Lexar's cost structure with business conditions and increase our development and go-to-market scale in order to compete more effectively," said Eric Stang, the CEO at Lexar. "By merging with Micron, Lexar can achieve significant cost synergies and become better positioned to satisfy customer needs and establish faster growth, especially in new emerging mobile handset and solid- state computing businesses."
The deal faces shareholder approval and other standard approvals. It could close by the end of the third quarter if all goes as planned. ®
Sponsored: Customer Identity and Access Management