(Bloomberg) – Renesas Electronics Corp. of Japan said they are in talks to acquire Dialog Semiconductor Plc, the UK disk designer of which Apple Inc.
According to a statement on Monday, Renesas is offering a cash offer of 67.50 euros per share. It is said that no final decision has been made and that there is no guarantee that it will proceed with the acquisition. The Japanese company would pay about 4.9 billion euros ($ 5.9 billion) to take over its target, Bloomberg News reported Sunday.
The offer price is a premium of 20% on Dialog’s Friday closing of 56.12 euros. Shares of the listed company in Frankfurt have risen by about 25% since the beginning of the year, boosted by strong demand for Apple’s 5G devices as well as takeover speculation.
Renesas shares fell to 6.9% in Tokyo.
The people familiar with the matter said Sunday that Dialog had advanced talks with suitors, including Renesas and worked with advisers. The people had previously held talks with STMicroelectronics NV before the French-Italian company was offered.
According to Bloomberg, the number of transactions involving semiconductor companies has more than doubled to $ 144 billion. Nvidia Corp. agreed in September to divest the chip division Arm Ltd. from SoftBank Group Corp. for $ 40 billion, taking control of some of the most widely used chip technology in the largest transaction ever in the industry.
Any agreement could attract investigators from UK regulators as countries become more protective of strategic industries such as semiconductors. Nvidia’s agreement for Arm is being investigated by the country’s competition watchdog. The Authority for Competition and Markets said it would pay more attention to strategic technological transactions, regardless of size.
The UK government is also planning to introduce new rules that will allow officials to look at past takeovers and mergers where concerns are expressed.
Renesas, which had a market value of $ 20.5 billion since closing Friday, is one of the largest suppliers of semiconductors used in automobiles. It also has European offices in the United Kingdom and Germany. In 2019, Renesas announced its acquisition of the US firm Integrated Device Technology Inc. completed, a deal worth more than $ 6 billion that helped it expand beyond the automotive sector.
Dialogue and Renesas have been working together for more than a decade. The British company, which specializes in the design of power management chips, said in August that it would work with Renesas on car computer platforms.
Both companies found themselves in the tension regarding the supply chain of semiconductors. Apple said in November that there is a shortage of key chips that drive the power consumption of iPhones and other devices. Within the automotive industry, there is a shortage of semiconductors that force automakers to halt production lines and tighten their relationship with chip suppliers.
Like Dialog, Renesas is also a supplier of Apple. The American technology giant allegedly held talks in 2014 to buy Renesas SP Drivers, which is 55% owned by Renesas. The unit, which manages LCD screens, was later sold to Synaptics Inc. for $ 475 million. sell.
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