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• Chinese regulators approved the deal, but it comes with several conditions that will last for five years
• SK Hynix will pay $7 billion by 2021 and the remaining $2 billion by March 2025
South Korean chipmaker SK Hynix Inc said Chinese antitrust authority has approved its $9-billion acquisition deal to buy Intel Corp’s NAND and SSD business, the final clearance hurdle of securing regulatory approval in eight jurisdictions.
In October 2020, the U.S. chip giant agreed to divest its memory chip and solid-state drive business to focus on its smaller but more lucrative Optane memory business, which uses more advanced technology, and double down on developing technology, including 5G network infrastructure, artificial intelligence, and edge computing.
“SK Hynix sincerely welcomes and appreciates the State Administration for Market Regulation’s merger clearance for the deal. SK Hynix will enhance its competitiveness of NAND Flash and SSD business by continuing the remaining post-merger integration process,” the company said in a statement.
Approval with conditions
There had been worries that China would not approve SK Hynix’s deal amid the tensions between the U.S. and China.
Following the approval, the South Korean chipmaker said the deal “is deemed mutually beneficial” for all three countries.
However, the Chinese regulators said that the approval comes with several conditions that will last for five years.
In its statement, China’s State Administration for Market Regulation said SK Hynix should expand its production quantity of PCIe and SATA enterprise-class solid-state disks products and supply the products at fair, reasonable, and nondiscriminatory prices.
It also said that SK Hynix should not force customers in China to exclusively purchase products from SK Hynix or companies controlled by SK Hynix.
Acquisition deal
The South Korean chipmaker’s largest-ever acquisition deal has already got approval from watchdog agencies in the United States, the European Union, the United Kingdom, South Korea, Taiwan, Brazil, and Singapore.
The deal will help SK Hynix expand its NAND SSD business and narrow the gap with market leader Samsung Electronics.
SK Hynix will make the first payment of $7 billion by 2021 and the remaining $2 billion by March 2025.
Picture Credit: Bloomberg