updated 05:20 pm EST, Mon November 14, 2011
Deal lets SK diversify into new businesses
SK Telecom is planning to purchase a 21 percent stake in Hynix Semiconductor. The deal will make the South Korean carrier the memory chip maker's largest shareholder. The transaction is valued at 3.4 trillion won, or about $3 billion.
SK will purchase a 6.4 percent share from nine banks. The financial institutions acquired 15 percent of Hynix's stock in a debt-for-equity swap after the company ran into financial trouble in the aftermath of the collapse of chip prices in 2001. The banks currently hold 15 percent of Hynix's stock. An additional 14.7 percent will come from the issuance of new Hynix shares.
The actual terms of the transaction may be adjusted after SK completes its due diligence in December. If all goes according to plan, the deal will close in the first quarter of 2012.
Hynix is the world's second-largest memory chip maker, in terms of revenue, after Samsung. SK Telecom in getting a stake would help guarantee supply and make sure Hynix stays afloat in a market where a lack of demand for traditional PCs might create an oversupply. [via Wall Street Journal (subscription)]