Intel and STMicroelectronics have announced the completion of the merger of their unprofitable memory divisions in a new company called Numonyx.

The credit crunch had forced the world’s biggest chipmaker and Europe’s biggest to delay the deal closure, due at the end of December, as new financing arrangements were worked out.

Lenders were to provide $1.3bn in debt financing according to the deal announced last May. But the two companies had to renegotiate terms as banks changed their offer to half the original total, with a senior loan of $650m and a $100m revolving credit facility.

Numonyx said on Monday that two European banks were now providing just $450m in financing.

Brian Harrison, chief executive of the new company, told a news conference this was a more responsible and conservative level of debt. He said $900m of the original $1.3bn would have become a cash dividend for Intel and STMicro, but no cash dividend would now be paid.

STMicroelectronics owns more than 48 per cent of the new company, Intel has 45.1 per cent and Francisco Partners, a Silicon Valley buy-out fund, has taken a 6.4 per cent stake for a $150m investment.

The merger makes Numonyx the number one maker of flash memory used in mobile phones. It manufactures the Nand and Nor types of flash memory, and is number one in Nor.

The new company has 7,000 employees and a headquarters in Switzerland.