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Top PE firms to bid for chipmaker

Tokyo, April 7, 2012

Private equity firms TPG Capital LP and China's Hony Capital are to bid jointly for Elpida Memory, a source familiar with the matter said, joining an increasingly international battle for the bankrupt Japanese chipmaker.

The two firms will take part in a second round of bidding for Elpida, due to close on April 27, said the person.

Elpida is the world's No 3 maker of dynamic random access memory (DRAM) chips, trailing Samsung Electronics and SK hynix with a market share of around 12 per cent. Suitors are likely to be interested in the chips it manufactures for smartphones and tablets.

With Chinese, US and South Korean firms in the bidding process, it looks increasingly likely there will be a foreign rescue within Japan's once-mighty technology sector.

South Korea's SK hynix has confirmed it is bidding, while sources have said that US firm Micron Technology is also in the race.

Japan's Toshiba Corporation has approached SK hynix about a joint bid after its solo offer was reportedly below Micron's bid of at least 150 billion yen ($1.82bn), other sources have said.

Elpida, formed over a decade ago via a merger of several big Japanese chipmakers' struggling DRAM operations, filed for creditor protection in late-February, with $5.6bn in debt - the biggest bankruptcy of a Japanese manufacturer.

The company had been struggling with weak chip prices and as consumers increasingly bypass PCs for products like Apple's iPad, which uses mainly flash memory.

It was also saddled with heavy capital spending, while a strong yen undercut its global competitiveness.-Reuters




Tags: China | Private equity | Bid | chipmaker | TPG Capital | Hony Capital |

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