South Korean chip manufacturer SK Hynix said On Wednesday, the company received merger clearance from China’s antitrust authorities for its $ 9 billion acquisition of Intel Corp.’s NAND and solid-state drive (SSD) businesses.
Last October, the US chip giant and SK Hynix reached the takeover agreement. Following the agreement, SK Hynix received grants from regulatory agencies in South Korea, the United States, the European Union, Taiwan, Brazil, the United Kingdom and Singapore.
SK Hynix said in its statement, “SK Hynix sincerely welcomes and appreciates the merger clearance from the State Administration of Market Regulation for the transaction. SK Hynix will improve its competitiveness in the NAND flash and SSD business by continuing the remaining post-merger integration process. ”
The acquisition, SK Hynix’s largest acquisition, will help SK Hynix expand its NAND SSD business and bridge the gap with market leader Samsung Electronics. In the meantime, Intel will keep the Optane business to invest in more advanced technology, Intel said last year. The US company plans to divest the NAND unit and double the development of technologies including 5G network infrastructure, artificial intelligence and edge computing.
SK Hynix will make the initial $ 7 billion payment by the end of this year and the remaining $ 2 billion by March 2025, a SK Hynix spokesman confirmed. Once the transaction is complete, the South Korean chipmaker will acquire Intel’s NAND SSD, NAND component and wafer businesses (including NAND-related intellectual property and employees) as well as its NAND memory manufacturing facility in Dalian.
Amid tensions between the US and China, there were concerns that SK Hynix will not receive China’s approval for the deal. SK Hynix said the approval was timely without any significant delay, as the deal is “considered mutually beneficial” for all three countries.
China’s state administration for market regulation said in his testimony on Wednesday that it had approved, but with a series of conditions that will last five years.
The terms include that SK Hynix will expand its production volume of enterprise-class PCIe and SATA hard drive products and deliver the products at fair, reasonable and non-discriminatory prices. It also said that SK Hynix should not force customers in China to only purchase products from SK Hynix or SK Hynix-controlled companies.
