Shares in Dialog Semiconductor 0OLN,
rose 21% on Monday after Japan’s Renesas Electronics snatched up $ 4.9 billion ($ 5.9 billion) from Apple supplier.
The total cash offer of € 67.50 per share represents a premium of 20% on Dialog’s closing rate on Friday, and a premium of 52% to a weighted average of three months, the company said in a statement.
DLGNF Dialog,
whose customers include Apple AAPL,
Samsung Electronics 005930,
Panasonic 6752,
and Xiaomi 1810,
said the deal was a “compelling opportunity” for its shareholders and that the board would unanimously recommend the offer.
Shares in Dialog DLG,
rose to 21% in early European trade on Monday, before falling back to 16.57% higher.
“We believe Renesas’ strong footprint in microcontrollers and system-to-chips will complement the best use of Dialog’s products,” UBS analysts said in a statement to customers on Monday.
Renesas 6723,
one of the largest car chip suppliers in the world, reduced its stock in Tokyo by 3.61% on Monday as investors digested the deal, the latest in a four-year acquisition. This included the Japanese company’s acquisition of the US firm Integrated Device Technology for $ 7.2 billion in 2018.
Acquisition of Dialog is the second time a UK chipmaker has become the target of overseas bidders after Nvidia NVDA,
purchased the 9984 from SoftBank Group in September 2020,
chip division Arm for $ 40 billion.
The deal comes amid an increase in consolidation in the semiconductor industry over the past few months. In October, AMD released AMD,
bought the competitor Xilinx XLNX,
in an overall transaction worth $ 35 billion, while Intel sold its $ 9 billion NAND memory unit to SK Hynix in January.
The takeover of Dialog may attract the attention of British regulators, who last year announced the biggest shake-up of the country’s takeover rules in two decades in an effort to protect strategic assets from hostile bidders.
Read: Offer to buy UK businesses to get tougher as ministers rule out ‘back door’ takeover of countries such as China, Russia and US
The UK competition regulator said in January that it would launch an investigation into Nvidia’s acquisition of Arm, including looking into whether Arm would have an “incentive to withdraw, raise prices or the quality of its IP” after the acquisition to lower. [intellectual property] licensing services to Nvidia’s competitors. ”
Read: Nvidia’s $ 40 billion takeover of Arm investigated by UK competition regulator
‘Although the deal is unlikely to be scrutinized by UK regulators, the fact that the CMA is [Competition and Markets Authority] “Looking at the recent agreement between Nvidia to acquire SoftBank’s Arm Holdings, there’s a risk we’ll see them take a look at this, ‘said Michael Hewson, chief market analyst at CMC Markets UK, in a note to clients on Monday.
UBS analysts said that, given the small scale of the dialogue and the fragmentation of the market in the automotive / industry, they believe that antitrust risk is likely to be ‘relatively low’.