STMicroelectronics N.V. (STM) announced that together with its partners Intel Corp. (INTC) and Francisco Partners, it has entered into a definitive agreement with Micron Technology Inc. (MU), in which Micron will acquire Numonyx Holding B.V. in an all-stock transaction. The Flash memory joint venture was created by the partners on Mar 30, 2008.

This transaction ensures sustainable continuity to customers and employees of what had been, before the creation of Numonyx, ST’s Flash memory business, and it opens a short-term path to liquidity for ST’s equity investment.

At closing Micron will issue to Numonyx’ three shareholders an aggregate of 140 million shares of Micron common stock, plus up to 10 million additional shares if the volume weighted average price of Micron’s common stock for the 20 trading days, ending two days prior to closing, is lower than $9.00 per share. Micron shares will be held by ST as a financial investment.

Based on Micron’s current trading price of $9.08 per share, ST will receive in exchange for its 48.6% stake in Numonyx and the cancellation of the 30-year note due to ST by Numonyx approximately 66.6 million shares of Micron common stock (taking into account a payable of $77.8 million due by ST to Francisco Partners) and the transfer of the M6 industrial facility in Catania, Italy. ST plans to contribute the M6 facility to the new photovoltaic joint initiative among Enel, Sharp and ST.

Also at closing, Numonyx will redeem the full amount of its outstanding $450 million term loan, while simultaneously terminating the guarantee of the $225 million debt issued by ST. Based on the current Micron trading price of $9.08 per share, the value of the Micron shares allocated to ST, net of the payable to Francisco Partners, would be approximately $527 million and the overall consideration would result, at the closing, in a gain for ST of about $280 million.

ST’s exit from the Flash memory business Incorporatedluding the termination of its exposure to the guaranteed debt, is a further step in executing its strategy towards a focused and less capital-intensive business model. The transaction is subject to regulatory review and other customary closing conditions and is not subject to Micron stockholder approval.

STMicroelectronics, an independent semiconductor company, together with its subsidiaries, designs, develops, manufactures, and markets semiconductor products used in various microelectronic applications Incorporatedluding automotive products, computer peripherals, telecommunications systems, consumer products, industrial automation, and control systems.

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