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Tsinghua Unigroup Reportedly Bids $23 Billion For Micron

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Shares of Micron Technology, Inc. (NYSE: MU) were trading 12 percent higher in the pre-market session following news Monday night that Tsinghua Unigroup, China's largest government owned chip design company, is looking to acquire Micron 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 Micron's 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 Company (NYSE: HPQ) server, storage and technology unit earlier this year.

The announcement of the takeover bid came just a few hours after David Einhorn of Greenlight Capital stated in an investor letter that Micron would be worth more than Netflix within several years. Shares of Micron have been beaten down lately, having fallen by more than 50 percent since the early December highs.

See Also: David Einhorn: Micron Will Be Worth More Than Netflix, Intuitive Surgical Short Covered, Apple Still No. 1

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 (NASDAQ: SNDK) were also trading higher in sympathy, up nearly 3 percent in the premarket.

Posted-In: Tsinghua Unigroup Wall Street JournalNews Rumors M&A Media


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