Biting the hand that feeds IT
Biting the hand that feeds IT
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Original URL: http://www.theregister.co.uk/2007/12/27/intel_stmicroelectronics_numonyx_credit_crunch/
Intel and STMicroelectronics NV have been forced to delay the merger of their cash-starved flash memory units because of "significant turmoil" in the financial markets.
The giant memory chip firms confirmed yesterday in separate statements (http://investors.st.com/phoenix.zhtml?c=111941&p=irol-newsArticle&ID=1089865&highlight=) that the planned partnership, dubbed Numonyx, has been pushed back to 28 March next year.
The deal had been expected to be completed by the end of this year but the credit crunch has put a dent in those plans with lenders only willing to offer less than half the original cash required.
In May $1.55bn had been offered in debt financing for the new Geneva-based company. Lenders have now significantly reduced that figure, to $650m along with a further $100m in a revolving credit facility.
Intel said: "We are in the process of renegotiating credit agreements, and clearly [the total] will be less.
"The markets have changed significantly since we first announced the deal."
Intel had hoped the merger would turn around fortunes for its troubled flash business as well as see it leap ahead of rival AMD which already has its own flash biz, Spansion.
The new venture could have annual revenue of up to $3.6bn and will create products for mobile devices such as MP3 players and digital cameras.
Once the deal finally completes, Intel will take a 45.1 per cent stake while STMicro will take 48.6 per cent.
Francisco Partners, a Silicon Valley-based private equity group, will invest $150m for a 6.3 per cent stake. ®
Numonyx, Hynix say two NAND heads better than one (7 August 2008)
http://www.theregister.co.uk/2008/08/07/hynix_numonyx_nand_agreement/
STMicro boss admits: 'We need to do more pruning' (29 May 2008)
http://www.theregister.co.uk/2008/05/29/stmicro_further_operations_cuts/
STMicro and NXP tie-up in wireless joint venture (11 April 2008)
http://www.theregister.co.uk/2008/04/11/stmicro_nxp_joint_venture/
Cheap Flash makes Intel lower Q1 forecast (4 March 2008)
http://www.theregister.co.uk/2008/03/04/intel_lowers_q1_2008_gross_margin/
Intel slobbers over flash-based server storage (19 September 2007)
http://www.theregister.co.uk/2007/09/19/intel_flash_storage_servers/
US antitrust group urges Intel investigation (30 August 2007)
http://www.theregister.co.uk/2007/08/30/aai_wants_intel_probe_expansion/
Intel frees Flash biz (22 May 2007)
http://www.theregister.co.uk/2007/05/22/intel_flash_stmicroelectronics/
Intel outlines PRAM production plan (8 March 2007)
http://www.reghardware.co.uk/2007/03/08/intel_pram_production_plan/
Spansion settles for IP Low (16 December 2005)
http://www.theregister.co.uk/2005/12/16/amd_spansion_ipo/
AMD forced to be more modest with Spansion IPO (16 December 2005)
http://www.theregister.co.uk/2005/12/16/amd_spansion_lower/
Supreme Court sides with SanDisk in Flash clash (13 December 2005)
http://www.theregister.co.uk/2005/12/13/supremes_side_sandisk/
SanDisk to appeal STMicro patent clash win (7 December 2005)
http://www.theregister.co.uk/2005/12/07/sandisk_vs_stmicro/
AMD's depressing Flash biz set for IPO (13 April 2005)
http://www.theregister.co.uk/2005/04/13/spansion_ipo_amd/
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