Japan’s Renesas to acquire IDT in $7.2bn deal
Chipmaker seeking to cement position in growing market for self-driving car tech
Japanese chipmaker Renesas Electronics has agreed to buy US rival Integrated Device Technology for an enterprise value of $7.2bn in a bid to cement its position in the growing automotive semiconductor market.
Shares in Renesas, which had expressed its interest in IDT two weeks ago, rose as much as 7.8 per cent.
On Tuesday, Renesas said it will pay $49 a share, which represents a 16 per cent premium to IDT’s closing price on Monday. The deal, which follows Renesas’s $3.2bn acquisition of US chipmaker Intersil last year, will increase the Japanese group’s net debt level to ¥757bn ($6.8bn).
Despite the high price, analysts said there was little overlap in the product portfolio of the two companies and will allow Renesas to expand its presence in the automotive segment to data centres and consumer devices.
“The deal is extremely meaningful for us to win globally,” Bunsei Kure, the chief executive of Renesas, said at a news conference in Tokyo. Hidetoshi Shibata , the company’s chief financial officer, also signalled the company was open to carrying out additional deals.
Formed in 2010, Renesas was a product of a Japanese government-orchestrated merger of the chip units of Hitachi, Mitsubishi Electric and NEC. After the 2011 earthquake and tsunami disrupted the global supply chain for carmakers,
Renesas subsequently received a bailout from the state-backed Innovation Network Corporation of Japan (INCJ) and customer companies such as Toyota, Nissan and Panasonic as it also sought to fend off a takeover from KKR, the US private equity firm. The INCJ remains the biggest shareholder in Renesas.