Japanese chip maker Renesas Electronics Corp has agreed to buy Dialog Semiconductor, an Apple supplier, for 4.9 billion euros ($ 5.9 billion) in cash.
Renesas, one of the largest automotive chip manufacturers in the world, offered 67.50 euros per share for Dialog, which represents a 20% premium over Friday’s closing price and a 52% premium over a weighted average three months. Dialog is listed in Frankfurt and headquartered in the United Kingdom.
“The transaction we announced today represents our next important step in catapulting Renesas’ growth plan,” said Hidetoshi Shibata, president and CEO of Renesas, of the latest in a series of acquisitions in recent years.
Dialog, which specializes in power management chips and low-power Bluetooth products used in fitness trackers and wireless headsets, said the deal was an “attractive opportunity” for its shareholders. His board of directors would unanimously recommend the offer, he said.
Dialog’s shares were traded 16% higher in Frankfurt, at 65.30 euros, almost the agreed selling price. The Anglo-German chip designer confirmed on Sunday that he had received an offer from Renesas in response to news that he was a takeover target.
The deal comes after Renesas and Dialog agreed in August to cooperate on automotive computing platforms, while a global shortage of semiconductors has forced some automakers to restrict production.
It also follows a series of acquisitions by Renesas in recent years, supported by its quest to increase its share of analog chips used to process signals for things like sound, light and temperature.
Renesas, which has a market share of about 30% for microcontrollers used in cars, bought American chip design company Integrated Device Technology Inc in 2018 for $ 6.7 billion after buying $ 3 2 billion from the American chip maker Intersil in 2017.
Renesas said it will issue up to 270 billion yen ($ 2.6 billion) in new shares to help finance the deal.
He anticipated incremental business revenue growth of approximately $ 200 million in four to five years after the deal was closed, while cost savings of $ 125 million would materialize in three years, he said.
Renesas shares fell by 6.9% on Monday, before closing 3.6%, lagging behind a 2.1% gain in the broader market.