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Renesas agrees to buy IDT
Posted on Tuesday, 11 September 2018 14:06
Renesas Electronics has announced it is buying US-based Integrated Device Technology (IDT), a designer and manufacturer of mixed-signal semiconductors, for USD 6.70 billion.
Under the terms of the transaction, the deal will be funded through a combination of cash reserves and bank loans totalling CNY 679.00 billion (USD 9.89 billion).
The offer price of USD 49.00 per share represents a 16.4 per cent premium to Nasdaq-listed IDT’s closing price of USD 42.08 on 10th September 2018, the last trading day prior to the deal being announced.
Subject to approvals from the target’s shareholders and relevant regulatory authorities, the acquisition is expected to complete in the first half of 2019.
Both parties’ boards have already unanimously voted in favour of the combination.
As a result of the acquisition, Renesas will broaden its portfolio within the semiconductor industry and gain access to IDT’s analogue mixed-signal products, including memory interface, smart sensors and optical interconnect systems, among others.
Reuters notes that the buyer’s desire to begin developing autonomous driving and connected car technologies was a factor in the decision to carry out the deal.
Bunsei Kure, chief executive of the Renesas, said: “IDT’s products combined with our MCUs, SoCs and power management ICs will enable Renesas to widen its product offerings as well as to expand its reach into areas such as the growing data economy-related space.”
However, an analyst has told Reuters that a transaction could be difficult due to the target’s lack of clients in the car sector.
Akira Minamikawa of IHS Markit, said: “IDT doesn’t have many automotive clients. Bringing their chips up to the level needed for automotive standards will not be easy.”
Headquartered in Tokyo, Renesas specialises in the designing and manufacturing of semiconductor products and claims to be the global leader in microcontrollers, analogue and other integrated platforms.
In the financial year ending 31st December 2017, it posted CNY 780.30 billion in net sales, compared to CNY 638.80 billion in 2016.
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