U.S.-based Micron Technology (IW 1000/436) unveiled a deal on July 2 to buy troubled Japanese chip-making rival Elpida Memory for $2.5 billion.

Micron, the world’s fourth largest maker of microchips, will pay 200 billion yen (US$2.5 billion) “to satisfy the reorganization claims of Elpida’s secured and unsecured creditors.”

Micron will acquire 100% of the equity of Elpida under the deal. That includes $750 million to be paid in cash at closing and the rest in installment payments through 2019.

“The agreement also calls for Micron to provide certain financing support for Elpida capital expenditures, subject to specified conditions, and to maintain Elpida’s operations and employees,” the statement said.

South Korea’s SK Hynix, the world’s second largest microchip maker, dropped its bid for Elpida earlier this year.