Hynix board agrees to split company


Hynix may yet revive its asset deal with U.S. rival Micron Technology

Staff and wires

SEOUL, South Korea -- South Korean chipmaker Hynix Semiconductor has agreed to a proposal from its creditors to split up the company.

Thursday's acceptance by the Hynix board comes little more than a week after it rejected a $3.4 billion sale of its memory assets to U.S. rival Micron Technology.

That deal, which had the backing of Hynix creditors, would have put together the world's No. 2 and No. 3 memory chipmakers, creating a venture that would have surpassed current No. 1, Samsung Electronics.

Hynix, which owes more than $5 billion, had been talking to Micron about a merger or asset sale for more than four months.

But the Hynix board stunned its creditors, Micron chief executive Steve Appleton, and observers when it rejected the deal and opted to go it alone.

Possible resumption


Hynix CEO Park Chong-sup stepped down last week

Analysts said Thursday's acceptance by the board of the creditors' follow-up proposal was a first step towards a possible resumption of talks between Hynix and Micron.

After the board's shock rejection last week, Micron said it was walking away from any further talks.

Hynix CEO Park Chong-sup, who had led the negotiations with Micron's Appleton, stepped down and was replaced last Friday by the company's chief operating officer Park Sang-ho.

South Korea's top financial regulator, Financial Supervisory Commission chief Lee Keun-young, said Thursday Hynix had made the "best choice" in agreeing to split up and sell its operations, Reuters news agency reported.

The company's actions showed it had given up hope of independent survival, Lee told reporters.

Hynix's board voted to accept a split-up but the scope of the plan and the selection of an outside adviser would require further discussion, the company said in a statement.

"The follow-up measures require that Hynix's Restructuring Committee review a restructuring plan, to be proposed by an outside consultant. Such outside consultant and its scope of work will be decided by the major creditor banks in consultation with Hynix," the board statement said.

Non-memory chips

Computer memory chips made up 70 percent of revenues last year, but Hynix also produces non-memory chips for mobile phones and other devices as well as liquid crystal displays used in flat screens.

Micron's $3.4 billion share and cash offer would have been South Korea's biggest asset sale to an overseas buyer.

Shares in Hynix closed 2.1 percent lower at 695 won Thursday after going as high as 805 won earlier in the day.

The shares hit a record low of 610 won earlier this week on doubts about the company's future.