Micron Technology and Kobe Steel have entered into a non-binding term sheet providing for the purchase by Micron of all of Kobe Steel’s equity interest in KMT Semiconductor for approximately $125 million. Micron currently owns a 25 percent stake in KMT.
KMT is a DRAM manufacturing joint venture between Kobe Steel and Micron located in Nishiwaki City, Hyogo Prefecture, Japan. KMT employs approximately 900 people and as of September 30, 2000, had total assets approximating $750 million, including property, plant and equipment with a carrying value of approximately $530 million.
KMT successfully implemented Micron’s 0.18 micron process technology over the past year and is initiating steps to convert its manufacturing processes to 0.15 micron technology. In connection with the transaction, it is anticipated that Micron will assume or repay all of KMT’s debt at closing, projected to approximate $325 million at closing.
The term sheet anticipates the parties will enter a definitive acquisition agreement, subject to standard terms and conditions, including satisfactory due diligence and regulatory approvals. The transaction is expected to close by the end of March 2001, at which time Micron will own 100 percent of KMT.
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