Renesas to Buy Intersil for $3.2 Billion
September 12 2016 - 9:50PM
Dow Jones News
Japanese chip maker Renesas Electronics Corp. agreed to buy
Intersil Corp. for about $3.2 billion, a deal expected to
immediately enhance its gross margins and earnings.
Renesas will pay $22.50 a share for California-based Intersil, a
premium of about 43.9% to the company's Aug. 19 closing price.
Intersil shares closed at $19.76 on Monday and rose 7.3% to
$21.21 after hours.
After Japanese business daily Nikkei reported the possible deal
last month, Renesas said it was considering various growth options
including buying Intersil.
Renesas was formed from the chip-making units of NEC Corp.,
Mitsubishi Electric Corp. and Hitachi Ltd.
The semiconductor industry has experienced a wave of
consolidation as chip makers and their suppliers look to build
scale in response to slowing growth and rising costs.
In July, Analog Devices Inc. agreed to buy Linear Technology
Corp. in a cash-and-stock deal initially valued at $14.8 billion.
Avago Technologies Ltd. completed its roughly $37 billion
acquisition of rival Broadcom Corp. in February, with the combined
company retaining the Broadcom name and AVGO ticker symbol.
Renesas expects to complete the purchase in the first half of
2017 and will finance it with cash on hand.
The companies expect the combination of Renesas microcontroller
and system-on-chip technology and Intersil power management and
analog capability will help Renesas "address some of the most
exciting opportunities in key areas such as automotive, industrial,
cloud computing, health care, and the Internet of Things."
Renesas projects the deal will eventually generate synergies of
$170 million.
Write to Josh Beckerman at josh.beckerman@wsj.com
(END) Dow Jones Newswires
September 12, 2016 21:35 ET (01:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Mitsubishi Electric (PK) (USOTC:MIELY)
Historical Stock Chart
From Apr 2024 to May 2024
Mitsubishi Electric (PK) (USOTC:MIELY)
Historical Stock Chart
From May 2023 to May 2024
