A Chinese state-owned company is lining up a US$23 billion offer for US memory chip maker Micron Technology Inc. in what could be the largest takeover of a foreign company by a Chinese firm.
Tsinghua Unigroup Ltd. is offering US$21 a share for Micron, a 19.3 percent premium over the stock’s close on Monday, according the Wall Street Journal.
A Micron spokesman said the company has not received a buyout offer and declined further comment.
Any deal is likely to face close scrutiny by officials in Washington, possibly by the Committee on Foreign Investments in the United States, a panel of more than a dozen departments and agencies across the US government.
The panel is charged with determining whether any foreign acquisitions or investments pose a security threat.
If a Micron deal goes through, it would dwarf all previous Chinese takeovers of US firms.
The previous record was the US$7.1 billion takeover by Chinese meat processor Shuanghui International Holdings Ltd. of Smithfield Foods Inc. in 2013, according to data provider Dealogic.
China is particularly weak in memory chips, having developed none of the key technology needed for the data-storing components.
“They have decided that they really have to buy somebody because they can’t deliver the intellectual property themselves,” said Handel Jones, president of the Silicon Valley consultancy International Business Strategies.
A Micron takeover would continue a recent wave of consolidation in the chip sector, partly driven by companies struggling to find growth by other means.
The largest to date is a US$37 billion cash and stock deal for Avago Technologies Ltd. to buy Broadcom Corp., announced in late May.
Shortly afterward, Intel Corp. announced a deal to buy Altera Corp. for about US$16.7 billion in cash.
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