SK Telecom Co., Korea's top mobile operator, said Monday it will pay 3.43 trillion won ($3.06 billion) for a 21.05 percent stake in Hynix Semiconductor Inc.
SK Telecom said in a regulatory filing that it will buy 44.25 million existing shares and 101.85 million new shares from creditors of the world's second-biggest memory chipmaker.
Hynix's board agreed to set the price of new shares at 23,000 won each as part of the deal, which is pending regulatory approval.
"We signed a share sale agreement with SK Telecom, which was picked as the preferred bidder for Hynix," main creditor Korea Exchange Bank (KEB) said in a statement.
SK Telecom was the sole bidder for a major stake in the chipmaker on Thursday, the bidding deadline, as creditors sought to sell half of their 15 percent stake in the chip giant plus new shares after several botched attempts.
KEB added that creditors aim to wrap up the deal in the first quarter of next year at the latest, following due diligence this month and price negotiations next month.
If finalized, the deal will represent SK Telecom's biggest acquisition. The mobile carrier is seeking to jump into the memory chip sector, as growth in the domestic mobile market stagnates. The move will pit SK Telecom against Samsung Electronics Co., the world's top memory chipmaker.
SK Telecom, which made aborted attempts to launch successful overseas businesses in previous years, said the acquisition of the chipmaker would help the company go global.
"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 said in a statement.
SK Telecom added that the capital from the new share issue will be used to shore up Hynix's balance sheet and to make investments in the semiconductor business.
Meanwhile, Standard & Poor's Ratings Services put Hynix on the positive credit watch list, adding that it may upgrade Hynix's long-term corporate credit rating by one notch, if the deal proceeds as planned.
But the credit rating agency also warned it could downgrade SK Telecom's long-term credit rating by one notch to A- if the mobile carrier goes ahead with the acquisition.
Shares of SK Telecom closed down 0.33 percent at 149,000 won on Seoul bourse. Shares of Hynix Semiconductor ended at 22,300 won, up 3.48 percent.
Following several failed attempts, KEB and other creditors are seeking to salvage their investments after pumping a combined $4.6 billion into Hynix in 2001 and 2002 to keep it afloat. (Yonhap)