Japan's Renesas to raise $2b to fund Dialog purchase

FILE PHOTO: Renesas Electronics Corp's logo is seen on its product at the company's conference in Tokyo, Japan, April 11, 2017. REUTERS/Toru Hanai/File Photo

TOKYO: Japan's Renesas Electronics Corp said it will raise 218.5 billion yen ($1.99 billion) through a new share issue to help the automotive semiconductors maker fund its planned $6 billion purchase of Dialog Semiconductor.

In February, Renesas announced the acquisition of the Anglo-German chip designer and Apple Inc supplier in a bid to tap the growth in assisted driving technology and the roll out of broadband 5G networks that could spur connectivity across smart devices.

The two companies had been cooperating in automotive computing platforms since August.

"The issuance of new shares and the acquisition will enable Renesas to maintain a strong financial base that will enable Renesas to execute its future growth strategy," the company said in a statement.

The Japanese company, which has a 30% global market share for microcontrollers used in cars, said it expects the Dialog deal to conclude by the end of the year, subject to regulatory approval.

Dialog specialises in power-management chips and low energy Bluetooth products.

In a secondary offer, Renesas said its largest shareholder the Japanese state-backed Innovation Network Corp of Japan (INCJ) will also sell 167 million shares.

That sale will reduce its stake in the chipmaker to 20% from 32%, an INCJ spokesman said.

INCJ rescued Renesas in 2013 with a 150 billion yen cash injection in return for a two-thirds stake in the company that it has progressively reduced. - Reuters

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