STMicroelectronics and Intel collaborating to create a flash memory chip venture

STMicroelectronics and Intel has announced that together with private equity firm Francisco Partners L.P. they are going to setup a venture to make flash memory chips.

The flash memory chips are in high demand in the market today as they are used in everything from mobile phones to digital cameras to mp3 players to notebook computers.

The deal between the two companies would see STMicroelectronics selling their NAND and NOR flash memory assets to the venture. Intel would be selling their NOR flash memory assets and resources to the venture.

Intel would get in return a 45.1 percent stake in the venture along with $432 million cash payment at close.

STMicroelectronics would get a larger 48.6 percent stake and a $468 million cash payment at close.

Francisco Partners L.P. would be investing $150 million cash for convertible preferred stock representing a 6.3 percent stake in this venture.