S. Korea's SK Telecom signs deal to buy Hynix

Nov 14, 2011

South Korea's top mobile carrier SK Telecom said Monday it signed a deal to buy a controlling stake in Hynix Semiconductor, the world's number two memory chip maker.

SK Telecom said it agreed to buy a 21.1 percent stake in Hynix for 3.427 trillion won ($3.05 billion). The stake includes 14.7 percent of the new shares to be issued by Hynix's creditors-turned-shareholders.

SK Telecom, which controls about half the country's mobile market, said it would finalise the deal in the first quarter of next year.

The deal represents the biggest acquisition by SK Telecom, a key affiliate of the SK Group -- the country's third-largest conglomerate by assets -- which has sought to diversify its business because of stagnant growth in the saturated domestic mobile market.

SK Telecom has said that convergence of the chipmaking and telecoms businesses would enhance efficiency and help expand its overseas interests.

Creditors rescued Hynix by swapping their debt holdings into shares in 2001 and 2002.

They have been trying for years to sell out, but previous attempts have been hampered by uncertainties over the chipmaking sector and the need for huge investment in Hynix.

Last month Hynix said it swung to a net loss of 562.62 billion won ($496 million) in the July-September quarter compared with a record net profit of 1.04 trillion won in the same period last year.

Major chipmakers are struggling as the weakening global economy hits demand for chips and pushes down prices, while the popularity of smartphones and tablets has also decreased demand for personal computers.

"Hynix's global business networks and its experiences in the memory business overseas will help SK Telecom's efforts to launch diverse fixed-line and wireless platform businesses," SK Telecom said in a statement.

Rating agency Standard & Poor's placed its "A" long-term corporate credit rating on SK Telecom on CreditWatch.

"The highly cyclical characteristics of the semiconductor business will hurt SK Telecom's strong business risk profile," it said.

The agency said Hynix's volatile operating performance and large capital expenditure requirements could undermine SK Telecom's stable cash flows.

"We believe this purchase indicates that SK Telecom is pursuing a significantly more aggressive growth strategy than we have factored into the company's current 'A' rating," it said.

Explore further: Why the Sony hack isn't big news in Japan

add to favorites email to friend print save as pdf

Related Stories

SK Telecom named as preferred bidder for Hynix

Nov 11, 2011

South Korea's top mobile carrier SK Telecom has been selected as preferred bidder for a controlling stake in Hynix Semiconductor, the world's number two memory chip maker, creditors said Friday.

SK Telecom makes final bid for Hynix stake: report

Nov 10, 2011

South Korea's top mobile carrier SK Telecom has submitted a final bid to buy a controlling stake in Hynix Semiconductor, the world's second-largest memory chip maker, a report said Thursday.

Two S. Korea firms bid for Hynix stake

Jul 08, 2011

Two South Korean companies said Friday they had submitted preliminary bids to buy a controlling stake in Hynix Semiconductor, the world's second-largest memory chip maker.

South Korea's Hynix swings to net loss in Q3

Oct 27, 2011

South Korea's Hynix Semiconductor, the world's second-largest memory chip maker, said Thursday it swung to a third-quarter net loss as weak demand for personal computers dampened sales.

SKorea's Hyosung group bids for Hynix: report

Sep 22, 2009

A minor business conglomerate in South Korea looks set to buy a major stake in the world's second biggest memory chip maker after becoming the only firm to submit a bid, a report said Tuesday.

Recommended for you

Why the Sony hack isn't big news in Japan

15 hours ago

Japan's biggest newspaper, Yomiuri Shimbun, featured a story about Sony Corp. on its website Friday. It wasn't about hacking. It was about the company's struggling tablet business.

Sony faces 4th ex-employee lawsuit over hack

20 hours ago

A former director of technology for Sony Pictures Entertainment has sued the company over the data breach that resulted in the online posting of his private financial and personal information.

Sony tells AFP it still plans movie release

21 hours ago

Sony Pictures boss Michael Lynton denied Friday the Hollywood studio has "caved" by canceling the release of "The Interview," and said it still hoped to release the controversial film.

2012 movie massacre hung over 'Interview' decision

Dec 19, 2014

When a group claiming credit for the hacking of Sony Pictures Entertainment threated violence against theaters showing "The Interview" earlier this week, the fate of the movie's big-screen life was all but ...

Clooney slams skittish Hollywood after Sony hack

Dec 19, 2014

Film star George Clooney slammed the Hollywood movie industry for failing to stand up against the cyber threats that prompted Sony Pictures to cancel release of the movie "The Interview."

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.