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State-linked Chinese company Tsinghua Unigroup makes US$23 billion bid for Micron

By Wong Chung Wee - on 15 Jul 2015, 2:38pm

State-linked Chinese company Tsinghua Unigroup makes US$23 billion bid for Micron

(Image source: WSJ)

According to a WSJ report, China’s Tsinghua Unigroup Ltd has expressed interest to acquire US-based Micron Technology Inc. to the tune of US$23 billion. Initially, this development was dispelled as a pure rumor; however, Bloomberg managed to reach out to Tsinghua chairman Zhao Weiguo and he said that the state-linked company was “very interested in cooperation” with Micron. In May, Tsinghua Unigroup took a majority stake in HP’s China server and storage business; Tsinghua now owns 51% of the joint venture with HP, in an attempt to ramp up the sales of HP’s enterprise hardware in China. However, as observed by WSJ, the current intention of Tsinghua will face strong headways, in the form of intense scrutiny from United States officials, especially the review body of the Committee on Foreign Investments.

Even if the alleged bid by Tsinghua doesn’t pan out, at least news of its intention managed to provide a fillip to the share price of Micron Technology. Since the beginning of this week, its share prices have been boosted by almost 10%. On June 26 this year, Micron reported its first revenue decline due to decreasing demand for its DRAM chips. This is primarily due to a decline in global PC shipments. Besides DRAM chips, the company also manufactures NAND flash memory chips and SSDs.

(Source: The Wall Street Journal via The Straits Times, Micron)

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