BOISE, Idaho ( TheStreet) -- Micron Technology ( MU) agreed to acquire Numonyx Holdings, a maker of memory products, in a stock deal valued at $1.27 billion.

Micron will issue 140 million shares to Numonyx shareholders, Intel ( INTC), STMicroelectronics ( STM) and Francisco Partners. An additional 10 million shares will be issued ratably to Numonyx shareholders under certain conditions.

Micron, in a statement announcing the transaction, said the merger "strengthens Micron's position as one of the world's leading memory companies" with a broad portfolio of DRAM, NAND and NOR memory products. The deal also would help Micron gain "increased manufacturing scale globally," the company said.

Micron estimates the transaction will add to free cash flow and non-GAAP earnings beginning in fiscal 2011.

Micron sees the deal closing within three to six months.

Shares of Micron closed at $9.08, up 17 cents, on Tuesday.

-- Reported by Joseph Woelfel in New York.

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