(RTTNews) -  In exchange for its stake in Numonyx, STMicroelectronics will receive about 66.6 million shares of Micron, based on its current trading price of $9.08 per share. Additionally, the Catania, Italy-based M6 industrial facility will be transfered to STMicroelectronics. The agreement also provides for the cancellation of the 30-year note due to STMicroelectronics by Numonyx. The consideration includes the $77.8 million due by STMicroelectronics to Francisco Partners.

Net of the payables to Francisco Partners, STMicroelectronics is expected to receive about $527 million worth of Micron shares, resulting in a gain of about $280 million, upon closure of the deal.

"The exit from the Flash memory business, including the termination of our exposure to the guaranteed debt, is a further step in executing our strategy towards a focused and less capital-intensive business model," chief financial officer of STMicroelectronics, Carlo Ferro stated.

Micron noted that its currently projects the transaction to be accretive to the company on both free-cash flow and non-GAAP earnings beginning fiscal year 2011. Meanwhile, Numonyx balance sheet is anticipated to be debt-free upon closure of the deal.

In its recent first quarter, Micron reported in December a a profit compared to a loss last year, helped by sales volume growth and higher average selling prices. Net income was $204 million or $0.23 per share, compared to a loss of $718 million or $0.93 per share in the prior-year quarter. Quarterly net sales increased to $1.74 billion from $1.40 billion in the same quarter last year.
MU closed Tuesday's regular trading session at $9.08, up $0.17 or 1.91% on a volume of 20.84 million shares, lower than the three-month average volume of 27.12 million shares. In the past 52-week period, the stock has been trading in a broad range of $2.55 to $11.34.

STM closed at $8.09, up $0.09 or 1.13% on a volume of 2.85 million shares, and INTC closed at $19.65, up $0.30 or 1.55% on a volume of 69.45 million shares.

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by RTT Staff Writer

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