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Japan’s Renesas to buy U.S. chipmaker IDT for $6.7 billion

Reuters, AFP-JIJI

Chipmaker Renesas Electronics Corp. said Tuesday it has agreed to buy U.S. peer Integrated Device Technology Inc. for about $6.7 billion (¥747 billion), aiming to boost its expertise in self-driving car technologies.

The deal allows Renesas, second only to NXP Semiconductors NV in chips used in cars, to bring on board IDT’s know-how in chips for wireless networks and data storage which are crucial for self-driving cars.

Renesas will pay $49.00 per share in cash for all IDT outstanding shares, compared with Monday’s close of $42.08. The deal is expected to be closed in the first half of 2019, following approval by IDT shareholders and the relevant regulatory authorities, Renesas said in a statement.

It will finance the acquisition with ¥679 billion of bank loans and cash, it said in the statement.

The firm said the deal with IDT should “strengthen its presence in the industrial and automotive segments.”

Renesas was created in 2010 from a merger of NEC Corp.’s chip division and Renesas Technology, which itself was established through a merger of the chip units of Hitachi and Mitsubishi Electric Corp.

It was late to join a wave of consolidation in the chip industry as it struggled to recover from damage suffered at key plants in the earthquake and tsunami that hit Japan in 2011.

Last year it bought U.S. chipmaker Intersil Corp. for $3.2 billion to expand its portfolio in analog chips, which process signals such as sound, light and temperature before converting them into digital signals.

“The Intersil acquisition brought diverse talent and management capabilities to accelerate Renesas’ global operations. The transaction announced today extends this effort and will provide Renesas with further proficiency to execute global strategy,” the statement said.

IDT has 1,700 employees worldwide and generated turnover of $842.8 million in 2017-2018.