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FTC seeks more data on Intel flash spinoff
- — 31 August, 2007 10:30
US government antitrust regulators have asked Intel and STMicroelectronics NV to provide more information about their plan to spin off their flash memory unit into a new company, the vendors said Thursday.
The US Federal Trade Commission made the request as part of its regulatory review in an effort to ensure the deal does not violate antitrust laws, according to Intel. If FTC investigators approve the terms, Intel and ST will be able to close the deal after a 30-day waiting period, the company said.
"These kinds of transactions are reviewed by the FTC and it's not unusual for them to come back and ask for more information," said Intel spokesman Tom Beermann. Intel plans to comply with the request, but gave no deadline for providing the new information.
"As part of the regulatory review, they do look at antitrust issues. This is a fairly complicated deal because there are three partners and there are different types of technology, and it is a fairly large deal," Beermann said.
Intel and STMicroelectronics will share ownership of the new semiconductor business with ST holding a 48.6 percent stake, Intel owning 45.1 percent and private equity firm Francisco Partners LP holding 6.3 percent. The new company will be based in Switzerland and incorporated in the Netherlands. It will compete against flash vendors including Samsung Electronics Co., Toshiba and Spansion Intel's main chip rival AMD spun off its flash unit in December 2005 to create Spansion.
Intel and ST announced plans for the new business in May and expect it to employ about 8,000 staff. They will make NOR and NAND-type flash chips, which are typically used for storing data in consumer and industrial products such as cell phones, MP3 music players and digital cameras.
Intel has struggled for years to make a profit from its flash business, and earlier in May said it would lay off as many as 1,000 workers when it closed an outdated flash plant in New Mexico.
A spokeswoman for ST said the company also planned to comply with the FTC request, but would not confirm whether it was related to antitrust concerns.
"We will provide all the information they need. The FTC needs it by the second half of 2007," said ST spokeswoman Carol Brown. "This is just part of the approval process."