A Renesas Electronics Corp. central processing unit (CPU) board and microcontrollers are arranged for a photograph in Soka City, Saitama Prefecture, Japan. (Photographer: Kiyoshi Ota/Bloomberg)

Renesas Is Considering an Acquisition of U.S. Chipmaker IDT

(Bloomberg) -- Renesas Electronics Corp., the second-biggest supplier of semiconductors used in cars, said it’s considering an acquisition of Integrated Device Technology Inc. to expand beyond the automotive sector.

The two companies will meet next week and Renesas plans to make a tender offer valued at about $6 billion, though prospects for an agreement are unclear, Japan’s Nikkei reported earlier Friday. Any deal will be funded with cash and loans, it added. The Japanese chipmaker later said in a statement that a deal with IDT was just one option under consideration and that nothing had been decided.

An acquisition of the auto and network electronics parts-maker would mark another significant expansion for Renesas. In June, Chief Financial Officer Hidetoshi Shibata said the Tokyo-based company was planning acquisitions outside of the automotive industry and into fields from health care to aerospace.

Shares of IDT have surged 27 percent this year, almost four times the advance of the S&P Mid-Cap 400 Index, valuing the company at roughly $4.9 billion. The stock surged as much 14 percent in pre-market trade.

Renesas, second only to NXP Semiconductors NV in automotive market share, gets more than half of its revenue from auto-sector customers. Last year, the Japanese company paid $3.2 billion for Intersil Corp., a U.S. chipmaker whose product lineup includes semiconductors that manage battery voltage in hybrid and electric vehicles.

Renesas was formed in 2010 through the merger of money-losing chipmakers NEC Electronics Corp. and Renesas Technology Corp., a venture between Hitachi Ltd. and Mitsubishi Electric Corp. Innovation Network Corp. of Japan later became the chipmaker’s controlling owner when it stepped in to fund the then-struggling company.

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