Why A Chinese Company Is Interested In Micron, And Why Politicians Will Care

Jul 15, 2015

Boise-based Micron is the rumored focus of a takeover offer from a Chinese company.

The company is one of the biggest employers in Idaho.
Credit Micron Technologies

The Wall Street Journal first reported the possible interest from Tsinghua Unigroup, a Shangai company with ties to the Chinese government.

Dan Gallagher is a writer with the Journal, and has been following the story. He says Micron’s median share price is $29 a share, but the Chinese company is interested in buying it for $21 a share.

"The stock has arguably been undervalued and that tends to draw interest among people who think they can get a good deal," says Gallagher.

Micron hasn't had a good year on the stock exchange, which some analysts say could be attractive to potential buyers. But the business is still a big player in the memory chip market, and a sale would face an uphill battle.

Gallagher says Micron can afford to be more picky if the company is really considering a buyer. But, he says even if Micron shareholders were to OK a sale to Tsinghua, the deal would face some tough questions from the U.S. government.

"Part of the broader agenda here is China has broadcast that it wants to build up a stronger industry in chip making. And not just on memory chips like Micron does, but across all kinds. They want to build up their know-how, their production abilities."

Gallagher says a sale to a Chinese company would prompt concern among American politicians who don't want to see China acquire the technology company

Micron is one of the biggest employers in Idaho.

Find Frankie Barnhill on Twitter @FABarnhill

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