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Image source: Inotera.

On Monday morning, Micron Technology (NASDAQ:MU) announced that it is buying 67% of Taiwanese memory chip producer Inotera Memories in a $3.2 billion deal.

The agreement puts a $0.92 price on each Inotera share, traded on the Taiwanese stock exchange. The sale should close in the middle of 2016, assuming that the usual regulatory proceedings work out as planned. Inotera and Micron are still hammering out the final details of the contract, and should have a final version ready in approximately 60 days.

Micron is financing the buyout with a combination of existing cash, $2.5 billion of new debt, and $1 billion of Micron shares. Although Inotera is a publicly owned company, sector rival Nanya Technology's parent company owns nearly half of what Micron is buying here. Nanya has agreed to vote in favor of the sale in return for that $1 billion block of Micron shares.

What's the big deal?
Quite frankly, Micron could live without this buyout. It's a positive move, but investors will actually hardly notice the difference in the long run.

Micron already buys and redistributes 100% of Inotera's chip production, which represents roughly 35% of Micron's total manufacturing volume. This deal simply puts a couple of close business partners even closer together. Kind of like a large company that's leasing some of its business assets, and now wants to own them instead.

It's not really a game-changing strategy overhaul, but more of an efficiency play. Micron's production workflow will simplify when the Inotera deal closes, as will the company's accounting.

Micron has experience with big-ticket buyouts, where failure just wasn't an option. The often uncertain Elpida deal created economies of scale that were absolutely necessary for survival. But that's not what we're looking at here.

If Taiwanese regulators or Inotera shareholders trip up this deal, clocks will not stop in Micron's Boise, Ida., headquarters. Getting this done would be a useful administrative move, but the beat goes on anyhow.

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Micron's Boise headquarters. Image source: Micron.

Throwing wrenches in the works?
That being said, having this billion-dollar deal on the stove -- complete with new debt financing -- probably kept Micron from entering a bidding war over SanDisk (NASDAQ:SNDK) this summer. Hard drive veteran Western Digital (NASDAQ:WDC) ended up paying $19 billion for the flash-memory device specialist, and it is quite possibly that Micron drove the price up.

But instead of reaching for a truly massive SanDisk deal, Micron decided to double down on business efficiency and wait for Seagate (NASDAQ:STX) to come looking for a deep and long-term supply contract. It won't be quite the growth play that a straight-up SanDisk buyout could have been, but this option also saves Micron billions of deal dollars while digging a hole in rival Western Digital's pocket. Smart thinking, I say.

The storage industry has boiled down to a handful of muscular players, much like the memory sector before it -- and thanks to the rise of solid-state storage, the two industries are inching ever closer together.

The Inotera buyout is not even a real factor in these trends. It's just a minor tweak to Micron's operational efficiency.

Anders Bylund owns shares of Micron Technology. The Motley Fool owns shares of Western Digital. Try any of our Foolish newsletter services free for 30 days.

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