Hynix sale hits $2 billion hitch


A fourth round of talks has ended with Hynix CEO Park almost sure to miss his deadline to wrap discussions this month

SEOUL, South Korea -- Hynix Semiconductor's talks with Micron Technology have hit a $2 billion hitch on pricing.

Hynix creditors have set a price target of $5 billion on its memory-chip operations, Yonhap news agency states. Micron has offered $3.2 billion.

An official from Hynix's main bank confirms that talks, which ended in Los Angeles on Thursday, stalled over price.

"Pricing differences are the key obstacle on the deal," an official from the Korea Exchange Bank told Reuters news service on Monday. "We expect Micron to give an answer by the end of this week whether to accept the counter proposals."

That delay would force the Korean chipmaker to miss a self-imposed deadline to wrap up its merger talks this month.

Hynix CEO Park Chong-sup had said he expected a memorandum of understanding would be signed in January. Park led the Hynix delegation that traveled to the United States for this fourth round of talks.

No time for new talks set

But Idaho-based Micron was always more circumspect about a deal.

The two sides have so far failed to reconcile the gap in price. The latest round of talks ended without a timetable for more talks.

"No agreement has been reached, and there are no further discussions planned at this time," Micron spokesman Sean Mahoney said, according to Reuters.

Korean media report that Micron offered around $3.2 billion for seven Hynix memory-chip factories, with that price including the assumption of $1 billion in debt for its plant in Eugene, Oregon.

Those are the bulk of Seoul-based Hynix's operations. The combination of world memory-chip No. 3 Hynix's capacity with that of world No. 2 Micron would surpass the current industry leader, Samsung Electronics.

Hynix stock was essentially flat in Monday afternoon trading, up 0.4 percent or 10 won over Friday's close at 2,490 won. That's on a day the main Kospi index moved ahead about 0.7 percent.

After the collapse of a deal to sell a controlling stake in Hyundai Securities to U.S. insurer AIG, and with problems surrounding the sale of Daewoo Motor to General Motors, the Korean government is keen to see the Hynix sale go through.

But local media report that the government and creditors are preparing alternative rescue strategies if the Micron talks fail.