Tsinghua Unigroup Bids $23 Billion for Micron

Shares of Micron Technology

are trading 12 percent higher in pre-market trade following news that Tsinghua Unigroup, China's largest government owned chip design company, is looking to acquire Micron Technology for $21 per share, according to both the Wall Street Journal and Bloomberg News. The $21 price tag represents a 19.3 percent premium to the MU closing price of 17.61 on Monday and values the deal at $23 billion. If the deal materializes, it would be the largest Chinese acquisition of a U.S. company, over three times larger than the $7 billion takeover of Smithfield Foods by Shuanghui International in May 2013. It would also not be the first U.S. acquisition by Tsinghua Unigroup, with the company purchasing a $2.3 billion stake in a Hewlett Packard

server, storage and technology unit earlier this year. The announcement of the takeover bid comes just a few hours after David Einhorn of Greenlight Capital stated in an investor letter that Micron Technology would be worth more than Netflix within several years. Shares of MU have been beaten down lately, having fallen by more than 50 percent since the early December highs. Micron spokesman Dan Francisco said Micron had not received any offers. Micron is the lone remaining U.S. producer of DRAMs (dynamic random access memory chips), and as such may draw security concerns by the U.S. government according to Mike Howard, a semiconductor analyst with IHS iSuppli and former Micron employee. "The U.S. needs to have a DRAM company," he said. Shares of competitor Sandisk Corporation

are also trading higher in sympathy, up nearly 3 percent in the pre-market.