Renesas $6.7 billion acquisition of IDT

Overview:

• Renesas Electronics, the Japanese chip maker, has agreed to acquire California-based chip design firm, Integrated Device Technology (IDT), for $6.7 billion.
• Renesas is the second-largest global supplier of semiconductors to the automotive sector. By acquiring IDT, Renesas will expand its semiconductor portfolio to other areas, such as data centres and communications devices. It will also acquire IDT’s expertise in chips for wireless networks and data storage, which are crucial for work on self-driving cars.
• The Tokyo-listed electronics firm will pay $49 per share in cash for Nasdaq-listed IDT’s shares, a 29.5% premium over its closing price on August 30, 2018, when details of the proposed deal were first announced. Renesas will finance the deal with cash and $6.1 billion of bank loans.
• Morgan Stanley, Bank of America Merrill Lynch and Mizuho Securities acted as financial advisors to Renesas, while JP Morgan acted as financial advisor to IDT.
• The deal is expected to close in the first half of 2019 subject to approvals by IDT’s shareholders and regulatory authorities, including the Committee on Foreign Investment in the United States.
• Last year, Renesas bought US chip maker Intersil for $3.2 billion to expand its portfolio in analog chips.

Prin Shasiharan - Researcher