By James Wells

Boise, Idaho, USA: Micron Technology has announced it has entered into a definitive agreement to acquire Lexar Media in a $688 million stock-for-stock merger.

According to a joint announcement by the companies, the acquisition will strengthen Micron’s position in the NAND flash memory business and enable the company to deliver innovative NAND flash media solutions.

Local employees of Lexar Australia were apparently shocked by the news.

Micron Technology does not have an office in Australia at the moment, and Lexar Australia is expected to trade from its local premises during the acquisition negotiations.

The transaction, which is subject to regulatory approval, is expected to be completed by the end of the third quarter of this year. Once this occurs, Lexar will become a wholly-owned subsidiary of Micron and Lexar will cease trading on the NASDAQ stock exchange.

With Lexar, Micron will continue its alliance with Intel to fight market leader, SanDisk, which is firmly attached to business partner Toshiba.

Industry analysts expect the new company to have little impact on SanDisk which is expected to maintain its 40-50 per cent share of the NAND flash card category.

“The merger is designed to combine Micron’s technology and manufacturing leadership in NAND flash memory with Lexar’s leadership in NAND controller and system design technology, brand recognition and retail channel strength to create a vertically integrated entity fully focused on the NAND business,” the statement said.

"With this acquisition, Micron will have a complete package of NAND memory solutions for our customers," said Micron chairman, CEO and president, Steve Appleton.

"Together with our NAND designs, technology, manufacturing capability and distribution channels, Micron is in a strong position to serve the flash storage requirements of consumer electronics and enterprise customers."

"Through this acquisition, we expect to better align Lexar’s cost structure with business conditions and increase our development and go-to-market scale in order to compete more effectively," said Lexar chairman, CEO and president, Eric Stang

"By merging with Micron, Lexar can achieve significant cost synergies and become better positioned to satisfy customer needs and establish faster growth, especially in new emerging mobile handset and solid-state computing businesses. We view this as an exciting opportunity for our company and its shareholders."

Lexar is a leading marketer and manufacturer of NAND flash memory products including memory cards, USB flash drives, card readers and ATA controller technology for the digital photography, consumer electronics, industrial and communications markets. The company holds over 94 issued or allowed controller and system patents, and licenses its technology to companies including Olympus Corporation, Samsung Electronics, SanDisk Corporation and Sony Corporation. Lexar sells its memory cards worldwide and through an exclusive agreement, also sells memory cards under the Kodak brand.

Micron Technology is one of the world’s leading providers of advanced semiconductor solutions. Through its worldwide operations, Micron manufactures and markets DRAMs, NAND flash memory, CMOS image sensors, other semiconductor components, and memory modules for use in leading edge computing, consumer, networking, and mobile products.