Apple Supplier Dialog Semiconductor Said to Be in Talks With Renesas Over $6-Billlion Buying Deal

"Our statement does not represent any intention to go through with an acquisition," Renesas said.

By Reuters | Updated: 8 February 2021 11:16 IST

Apple Supplier Dialog Semiconductor Said to Be in Talks With Renesas Over $6-Billlion Buying Deal

Under the deal, Renesas would pay EUR 67.50 (roughly Rs. 5,900) a share for Frankfurt-listed Dialog

Highlights

Renesas has 30 percent market share for microcontrollers used in cars
Renesas in 2018 agreed to buy US chip design firm Device Technology
Automotive chips account for around half Dialog's revenue

Japan's Renesas said it is in talks to buy British-based Dialog Semiconductor in a deal that would bolster its automotive chip business and value the Apple supplier at around $6 billion (roughly Rs. 44 crores).

Under the potential deal, Renesas would pay EUR 67.50 (roughly Rs. 5,900) a share for Frankfurt-listed Dialog, it said in a release to the Tokyo Stock Exchange, confirming an earlier statement from Dialog.

"Our statement does not represent any intention to go through with an acquisition," Renesas said.

[Sponsored] Samsung Galaxy S24: The Ultimate Camera Phone With Smarter On-Device AI

British financial regulations mean the Japanese chip maker must declare whether or not it will launch a bid by March 7.

The talks come after Renesas and Dialog deepened ties in August with an agreement to cooperate in automotive computing platforms as the Japanese firm looks to bolster its offerings amid growing demand for automotive chips.

A global shortage of semiconductors has forced some carmakers to curtail production plans.

Renesas, which has around a 30 percent global market share for microcontrollers used in cars, has been looking for ways to increase its share of analog chips used to process signals for things such as sound, light and temperature.

As part of that effort Renesas in 2018 agreed to buy US chip design firm Device Technology for $6.7 billion (roughly Rs. 48,800 crores) following the $3.2 billion (roughly Rs. 23,300 crores) purchase of US chipmaker Intersil in 2017.

A cash offer of EUR 67.50 (roughly Rs. 5,900) per share for Dialog would represent a 20 percent premium to its closing stock price on Friday of EUR 56.12 (roughly Rs. 4,900), when it had a market capitalisation of around EUR 4.3 billion (roughly Rs. 37,700 crores).

"A further announcement will be made as and when appropriate. There can be no certainty that any firm offer will be made for the Company, nor as to the terms on which any firm offer might be made," Dialog said in its statement.

The Japanese company is due to release its earnings results for the three months ended December 31 on Wednesday. Automotive chips account for around half its revenue. Its shares in Tokyo fell more than 5 percent in early trading.

Dialog last month gave an upbeat fourth-quarter revenue forecast due to strong demand for 5G phones and tablets.

© Thomson Reuters 2021

Can Realme X7 Pro take on OnePlus Nord? We discussed this on Orbital, our weekly technology podcast, which you can subscribe to via Apple Podcasts, Google Podcasts, or RSS, download the episode, or just hit the play button below.

Affiliate links may be automatically generated - see our ethics statement for details.

Comments

For the latest tech news and reviews, follow Gadgets 360 on X, Facebook, WhatsApp, Threads and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel. If you want to know everything about top influencers, follow our in-house Who'sThat360 on Instagram and YouTube.