EXHIBIT 99.1
News Release
C-98042
Micron Technology to Purchase
Memory Business of Texas Instruments
Boise, Idaho/Dallas, Texas, (June 18, 1998) -- Micron Technology, Inc.,
(NYSE: MU) and Texas Instruments Incorporated (NYSE: TXN) announced today a
definitive agreement for Micron to purchase the assets of TI's semiconductor
memory business for a combination of common stock and assumption of debt
totaling approximately $800 million (at Micron's current stock price). The
transaction includes the purchase of substantially all of TI's memory assets, as
well as TI's shares in its two DRAM manufacturing joint ventures.
This transaction strengthens the strategic roadmap of each company. Micron
expands its leadership in the memory market and its international presence,
while TI solidifies its position as a company focused on digital signal
processing and analog semiconductors.
Under the terms of the agreement, upon closing TI will receive
approximately 28.9 million shares of Micron common stock, $740 million principal
amount of seven-year, 6.5 percent notes convertible into an additional 12
million shares of Micron common stock, and a $210 million principal amount,
seven year, 6.5 percent subordinated note. The market value of these notes is
expected to be substantially less than their face amount. Micron also will
assume approximately $190 million of government-sponsored debt associated with
TI's Italian memory operations.
In addition to TI's memory assets, Micron will receive $750 million in
financing from TI to facilitate the deployment of Micron's technology throughout
the business. Micron and TI have also agreed upon a 10-year royalty-free
semiconductor patent cross-license agreement, to begin January 1, 1999. TI will
retain ownership of its related patents.
TI currently operates three wholly owned manufacturing facilities that are
included in the transaction: a wafer fabrication facility in Avezzano, Italy; a
wafer fabrication facility in Richardson, Texas (formerly known as TwinStar);
and an assembly/test facility in Singapore. Also included in the transaction is
TI's interest in two joint ventures: TECH Semiconductor Singapore, owned by TI,
Hewlett-Packard, Canon, and the Singapore Economic Development Board; and KTI
Semiconductor in Japan owned by TI and Kobe Steel. TI currently owns an
approximate 25 percent interest in each joint venture and has rights to 100
percent of the production of each joint venture. Micron expects to offer
positions to most of the TI memory employees.
"This strategic acquisition will enhance Micron's position as the most
cost-effective memory producer in the world, by leveraging our leading-edge
technology into existing fabs without significantly increasing R&D,
administrative and operating costs," said Steve Appleton, chairman, CEO and
president of Micron. "The additional global capabilities, including
participation in a unique joint-venture manufacturing strategy, positions Micron
to take advantage of future markets."
Thomas J. Engibous, TI chairman, CEO and president, said: "Several years
ago, TI set a course to become a company focused on its leadership position in
digital signal processing solutions. With this latest transaction, TI truly
becomes a DSP solutions company, and we do so under an innovative agreement that
positions TI to benefit from an upturn in the memory market."
The transaction is subject to several contingencies, including satisfactory
completion of due diligence, completion of appropriate agreements with various
third parties (including relevant government authorities), as well as customary
regulatory approvals (including Hart-Scott-Rodino and European Union antitrust
reviews). The transaction is expected to close in the second half of this year.
In conjunction with the transaction, TI will close its Richardson, Texas,
memory manufacturing operation, with Micron retaining the facility for future
capacity, pending a market upturn.
Separately, TI today announced a worldwide restructuring program. Over the
past several years, TI has transformed itself from a multi-business corporation
to a semiconductor company focused on digital signal processing solutions. In
doing so, TI has divested 12 businesses. As a result of these divestitures, the
pending sale of the memory business and weakness in the current semiconductor
market environment, TI will implement a worldwide restructuring program to more
closely match the size and cost of its support functions with the company's
overall size, and further combine manufacturing resources for more efficient
operations. The plan will include the elimination of approximately 3,500 jobs
around the world over the next few months through voluntary programs, attrition,
outsourcing and layoffs, as well as the closing of several facilities. When
fully implemented, the ongoing pretax savings from the restructuring is expected
to be about $270 million annually, which essentially offsets the fixed and
allocated costs of the memory business that are not absorbed by Micron.
TI expects to take a material charge for the restructuring in the second
quarter of 1998. In connection with the sale of the memory business, TI could
recognize a material loss when the transaction closes, based on the current
price of Micron common stock.
# # #
NOTE TO EDITORS:
Micron Technology, Inc., and its subsidiaries manufacture and market DRAMs,
very fast SRAMs, Flash, other semiconductor components, memory modules, personal
computer systems, and high-performance RFID products. Micron's common stock is
traded on the New York Stock Exchange (NYSE) under the symbol MU. To learn more
about Micron Technology, Inc., visit its Web site at www.micron.com.
Texas Instruments Incorporated is a global semiconductor company and the
world's leading designer and supplier of digital signal processing solutions,
the engines driving the digitization of electronics. Headquartered in Dallas,
Texas, the company's businesses also include materials and controls, educational
and productivity solutions, and digital imaging. The company has manufacturing
or sales operations in more than 25 countries.
Texas Instruments is traded on the New York Stock Exchange under the symbol
TXN. More information is located on the World Wide Web at http://www.ti.com.