SK Hynix announced Friday it won approval from CFIUS to acquire Intel’s NAND memory and storage business. The deal is valued at $9 billion.
CFIUS is the Committee on Foreign Investment in the U.S, an interagency committee of the U.S. government that reviews national security implications of foreign investments in U.S. companies, including the Intel-SK Hynix deal.
SK Hynix had been given approval on the deal earlier by the U.S. Federal Trade Commission and still faces other approvals from the UK and China.
The deal will put SK Hynix, based in South Korea, in second position behind Samsung in the NAND business.
RELATED: Intel agrees to sell its NAND unit to SK Hynix for $9B
The two companies announced the deal last October. Intel will hold onto its Optane business but SK Hynix 0swill buy Intel’s NAND SSD business, the NAND component and wafer business and the Dalian NAND memory factory in China.
Intel said it had been evaluating whether to exit the NAND flash sector after the memory market decline in 2018 due to an oversupply. Intel began in the 1960s as a memory product maker.
Last year, then-current CEO Bob Swan said the transaction would allow Intel to “further prioritize our investments in differentiated technology where we can play a bigger role in the success of our customers and deliver attractive returns to stockholders.”
The proceeds from the transaction will be used to advance what Intel sees as long-term growth priorities such as AI, 5G networking and intelligent, autonomous edge products.
As of last year, Intel was fifth in the global NAND market with about 11%, just behind SK Hynix with 11.7% and with Western Digital at 16% and Samsung at 31.4%. The acquisition of NAND flash from Intel will move SK Hynix to the second highest market behind Samsung, according to Trend Force.
The CFIUS approval was announced by SK Hynix. CFIUS is prohibited by law from publicly disclosing any information filed with the committee but does inform petitioners such as SK Hynix. The committee will not even publicly confirm or deny that a transaction notification has been made to CFIUS.
CFIUS is chaired by the Secretary of the Treasury and includes representatives from 16 U.S. departments and agencies, including Defense, State, Commerce and Homeland Security. It was first established under executive order by President Gerald Ford in 1975 and then empowered by Congress in 1988 to reject deals.