29 January 2002 Micron Technology’s bid to acquire troubled Hynix Semiconductor has broken down as a result of differences over the valuation of the South Korea-based company.

Micron had offered $3.1 billion (€3.6bn) in equity for Hynix’s core memory business, but the South Korean company’s creditors are not prepared to accept less than $4 billion (€4.64bn). Hynix has $6 billion (€6.7bn) in debts, after a debt-for equity swap, one of four bail outs for Hynix during 2001.

Its four largest creditors are the Korea Exchange Bank, Korea Development Bank, Hanvit and Chohung.

Since early December 2001, the two sides have engaged in several rounds of talks, but analysts agree that heavily loss-making Hynix needs the deal more than Micron does. Micron is mainly interested in the company for its fabrication facilities – which it can acquire for considerably less than it would cost to build them from new – and its customer base.

The proposed deal would not include Hynix’s non-memory business, which makes up less than a third of the company’s revenues. However, it is widely thought that Micron would take a minority stake in the unit to keep it going.