Intel's Sale of Chip Business to SK Hynix Clears Final Regulatory Hurdle

   By Yang Jie 
 

Intel Corp. has received the green light from China's antitrust regulator for the $9 billion sale of its flash-memory chip business to South Korea's SK Hynix Inc., clearing the last hurdle for the deal.

The deal will rid the U.S. chip giant of a business unit that has historical importance but has become increasingly challenged in recent years.

The two companies reached the deal more than a year ago and it has now received approval in eight jurisdictions, SK Hynix said in a statement Wednesday. That means it has gotten all the necessary approvals from competition authorities.

Chinese antitrust regulators play an increasingly important role in approving deals between multinational corporations.

The deal will tighten Intel's focus on memory chips using more advanced technology and help SK Hynix, the world's second-largest memory-chip maker after Samsung Electronics Co., better compete against its rivals.

The deal includes an Intel factory in Dalian, China. SK Hynix said the main part of the transaction, involving a payment of $7 billion, would close by the end of the year. The remaining $2 billion payment is expected to be made by March 2025.

China's State Administration for Market Regulation said in a statement Wednesday that SK Hynix had agreed to several commitments relating to its future sales to Chinese customers. The conditions, which will last for five years, require the company to further expand its production quantity and limit its ability to raise prices for certain products. SK Hynix must sell to Chinese customers on fair, reasonable and nondiscriminatory terms, the regulator said.

An SK Hynix spokesperson said there had been speculation that the approval could be delayed significantly amid tensions between the U.S. and China over semiconductors. He said the company's efforts to persuade the Chinese authorities paid off.

Write to Yang Jie at [e-mail]

(END) Dow Jones Newswires

December 22, 2021 05:40 ET (10:40 GMT)

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