Renesas announces $6.7bn purchase of IDT to increase chips for self-driving cars
The Japan-based semiconductor manufacturing company, Renesas Electronics, has announced it has agreed to acquire Integrated Device Technology (IDT) for $6.7bn in what will be the firm’s second major purchase as it increases its investment into semiconductors for self-driving vehicles, Reuters reports.
The agreement for the US-based company, IDT, highlights the strong competition between global chipmakers as they look to bolster their product line-ups and market share in the automotive chips industry.
The firm is renowned in the global market for microcontrollers used in cars and operates 30% of the market, with it only second to NXP Semiconductors NV in its auto-related chips pursuit.
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In a news conference, Renesas Chief Executive Officer, Bunsei Kure, said: “We were weak in chips for wireless networks needed for the Internet of things and connected cars. We’ve been wanting to get such assets.”
It is anticipated that Renesas will pay $49 per share in cash for IDT’s remaining shares which is believed to be a 16% premium to its closing price on Monday (10 September).
Renesas anticipates the deal to be completed during the first half of 2019 and is thought to finance the purchase through bank loans totalling 679bn yen ($6.1bn) as well as cash, with the firm expecting to pay back approximately 200bn yen every year.