Intel, SK Hynix Win EU Approval for Memory Unit Sale

Intel (INTC) and SK Hynix have moved closer to completing their memory and storage business transaction after securing EU approval. Intel is an American semiconductor company that primarily makes processor chips used in personal computers, data centers, vehicles, and other items. SK Hynix is a South Korean memory chipmaker.

Intel agreed to sell its NAND memory business to SK Hynix for $9 billion in October 2020. NAND is the most common type of flash memory, used in storage devices such as USB flash cards. The deal had already been approved in the U.S., and now it has been cleared in the EU. SK Hynix noted in a press release that the EU cleared the deal without attaching any conditions.

SK Hynix and Intel are waiting for approvals in other countries before they can close the transaction. They hope to secure the pending approvals this year.

SK Hynix expects Intel’s memory unit acquisition to expand its global footprint in the memory market. It also believes the acquisition will enhance its expertise and allow it to deliver more breakthrough memory products to its customers.

Intel allowed SK Hynix to pay for the memory unit purchase in two phases. The first payment will be $7 billion, and the remaining $2 billion will be paid in 2025 with the final closing. The memory unit sale is expected to allow Intel to invest in long-term growth priorities. (See Intel stock analysis on TipRanks)

Northland Securities analyst Gus Richard reiterated a Sell rating with a price target of $42 on Intel stock. Richard’s price target implies 25.11% downside potential from the current price.

“INTC is not dead, just severely wounded from self-inflicted injuries over the last couple of decades…but it can be fixed in our opinion,” noted Richard.

Consensus among analysts on Wall Street is a Hold based on 12 Buy, 10 Hold, and 9 Sell ratings. The average analyst price target of $65.52 implies 16.83% upside potential to current levels.

INTC scores an 8 out of 10 on TipRanks’ Smart Score rating system, indicating the stock is likely to outperform the market.