SK Telecom acquires 21% of Hynix for $3 billion

Reuters

SK Telecom (Seoul, South Korea) has agreed to buy 21% of Hynix Semiconductor (Icheon, South Korea) for $3 billion in its biggest ever acquisition that will help the creditors-turned-shareholders find a new owner for the chipmaker after years of failure.

The $3 billion deal comprises of SK Telecom paying $2 billion to Hynix and the remaining $1 billion to nine shareholders of the world's second largest computer memory chipmaker.

"With the fresh fund, Hynix will be able to improve its financial stability and continue to invest to raise its competitiveness,” the country's top mobile carrier says in a statement.

Ratings agency Standard & Poor's Ratings Services (New York), however, on Monday placed SK Telecom on a negative outlook, saying the takeover could hurt the firm's credit quality.

"Although Hynix maintains a strong position in the global memory semiconductor industry, its volatile operating performance and large capital expenditure requirements could undermine SK Telecom's stable cash flows," says Standard and Poor’s.

SK didn't elaborate how it will fund the acquisition.

SK Telecom had offered to buy new shares issued by Hynix at $20 each, or a 7% premium to the November 10 closing price, and purchase existing shares from nine shareholders for $21 each, a 14% premium.

Creditors saved Hynix from a debt crisis in 2001 and have scaled down their stake in Hynix but failed several times to complete a full sale.

Nine Hynix creditors-turned-shareholders, including Korea Exchange Bank, state-run Korea Finance Corp, Shinhan Bank and Woori Bank have sought to recoup billions of dollars they injected into the debt-ridden chipmaker several years ago following the Asian financial crisis.

Attempts to give management control to a domestic company for fear of a potential leak of advanced technologies has cooled interest in Hynix at a time when investors are avoiding the capital intensive and cyclical memory chip sector.

SK aims to close the deal by the first quarter of 2012.

 (Additional reporting by Hyunjoo Jin; Editing by Jonathan Hopfner and Miyoung Kim)

Related Articles

SK Telecom to cooperate with China Mobile for joint development in mobile games, M2M

Nokia Siemens Networks gets contract from Korea's SK Telecom

SK Telecom wins LTE spectrum auction for $920 million

ArticleTools

Featured Reports

Understanding and Capitalizing Upon Telecom APIs for Communications Enabled Applications
Big Data and Analytics software and applications will play a crucial role in making IoT a success. The data generated through sensors embedded in various things/objects will generate massive amounts of unstructured (big) data on real-time basis that holds the promise for intelligence and insights for dramatically improved decision processes.

Content Delivery Networks (CDN) 2015
Content Delivery Networks (CDN) represent large distributed system of servers deployed in multiple data centers across the Internet. CDNs provide solutions for efficiently and effectively managing content of all types. Solutions include core services such as aggregation, management, and distribution of content as well as a variety of value-added functionality.

Technologies Impacting and Impacted by Operational Support Systems (OSS)
There are significant changes underway in the CSP industry that are causing fundamental re-evaluations of business models, technology stacks and service offerings. This research assesses a range of relatively nascent technologies that have the potential to change the dynamic of OSS, whether via the networks they manage, or as building blocks on which to build better OSS tools.

Market Opportunity: Big Data in the Internet of Things
Big Data and Analytics software and applications will play a crucial role in making IoT a success. The data generated through sensors embedded in various things/objects will generate massive amounts of unstructured (big) data on real-time basis that holds the promise for intelligence and insights for dramatically improved decision processes.

Concise, Practical Market Reports on Big Data, IoT, CDN & More!
Access the exclusive new series of market research reports brought to you through the partnership of Mind Commerce research and TelecomEngine.com.
Browse the latest titles

 

 

Featured Events & Partners

GEN 15
Nov. 16-19, 2015

Omni Hotel, Dallas, Texas

The global gathering of networking professionals enabling the future of agile, assured and orchestrated services powered by CE 2.0, LSO (Lifecycle Service Orchestration), SDN and NFV.

Visit event website...
 

 

Business Wire