Imagine going from a money losing company to a profitable enterprise in one fell swoop. That's exactly what Micron Technologies (MU), a manufacturer of NAND Flash, DRAM and NOR Flash memory chips did when it took out one of its biggest competitors, bankrupt Japanese semiconductor giant Elpida.
As with Constellation Brands acquisition of control of Crown Imports, Micron's $2.5 billion July 2012 acquisition faced significant regulatory review in the U.S. and internationally. The acquisition, which closed in late July, gives Micron control of Elpira's 300mm DRAM fab in Hiroshima, Japan, and approximately 65% ownership interest in Rexchip, which includes 100% of the capacity of their 300mm DRAM fab in Taiwan.
In the first quarter with Elpida consolidated into its earnings, Micron was able to swing from a quarterly net loss to a profit. The company was also able to realize significant synergy on the top line through increased scale and bottom-line expense reductions after laying off 1,500 workers. Average selling prices for Micron's DRAM business rose in the second half of 2012.Micron shares are up over 230% year-to-date and are a top performer on the S&P 500.
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