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MarketScreener Homepage  >  Equities  >  Tokyo Stock Exchange  >  Renesas Electronics Corporation    6723   JP3164720009

RENESAS ELECTRONICS CORPORATION

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Renesas seen buying U.S. chipmaker Intersil for up to $3 billion -source

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08/22/2016 | 04:23am EDT
File photo of the logo of Renesas Electronics Corp at the company's headquarters in Tokyo

TOKYO (Reuters) - Japan's Renesas Electronics Corp (>> Renesas Electronics Corporation) is in the final stages of negotiations to acquire U.S. chipmaker Intersil Corp (>> Intersil Corp) for as much as 300 billion yen (2.28 billion pounds), an industry source familiar with the deal said on Monday.

TOKYO (Reuters) - Japan's Renesas Electronics Corp (>> Renesas Electronics Corporation) is in the final stages of negotiations to acquire U.S. chipmaker Intersil Corp (>> Intersil Corp) for as much as 300 billion yen (2.28 billion pounds), an industry source familiar with the deal said on Monday.

An agreement on the deal, which would be the latest in a trend of consolidation among global chipmakers, was likely to come "soon", said the person, who was not authorised to discuss the matter and thus asked not to be named.

Renesas said in a statement it was considering various options to grow, including a deal with a U.S. chipmaker, but that nothing had been decided. Intersil could not be reached for comment outside business hours in the United States.

Renesas shares rose as much as 4.2 percent in early morning trade before closing down 3.1 percent.

Some investors have doubts about how much the deal could boost Renesas's profits, said Gavin Parry, managing director of Parry International Trading Ltd in Hong Kong.

Renesas Chief Financial Officer Hidetoshi Shibata told Reuters in an interview late last year that the company had earmarked billions of dollars for acquisitions to defend an industry lead under threat from merging peers. He noted that Renesas had over 300 billion yen in cash to fund potential acquisitions.

Intersil had a market capitalisation of more than $2.1 billion as of Friday. Renesas will add a premium to buy Intersil, seeking to take full control of the Milpitas, California-based company, the Nikkei business daily reported earlier on Monday.

Renesas plans to use cash on hand and may also consider borrowing funds from banks, the Nikkei said, adding that the deal could be reached as early as this month.

Slowing growth in computers and smartphones - the traditional mainstays of the industry - fuelled a wave of mergers last year, with chipmakers turning to areas such as auto electronics for sales growth.

Demand for cheaper chips and new products to power internet-connected gadgets has also driven consolidation in the industry.

Worldwide semiconductor M&A topped $80 billion last year, Thomson Reuters data showed.

Renesas was created in 2010 from a merger of NEC Corp's (>> NEC Corp) chip division and Renesas Technology, which itself was established through a merger of the chip units of Hitachi Ltd (>> Hitachi, Ltd.) and Mitsubishi Electric Corp (>> Mitsubishi Electric Corporation).

At the end of last year, Tokyo-based Renesas was the world's third-largest chipmaker by market share, with 9.1 percent, data from technology research firm Gartner showed.

The Japanese company lost its second-place spot after Dutch rival (>> NXP Semiconductors NV) bought U.S. chipmaker Freescale Semiconductor Ltd in a $12 billion deal in December.

(Reporting by Makiko Yamazaki, Chang-Ran Kim and Thomas Wilson in TOKYO and Catherine Ngai in NEW YORK,; Editing by Stephen Coates and Muralikumar Anantharaman)

By Makiko Yamazaki

Stocks mentioned in the article
ChangeLast1st jan.
GARTNER INC -0.17% 122.38 Delayed Quote.-20.49%
HITACHI, LTD. -1.23% 3454 End-of-day quote.-25.34%
LINE CORPORATION -0.18% 5580 End-of-day quote.4.30%
MITSUBISHI ELECTRIC CORPORATION -1.46% 1415 End-of-day quote.-5.57%
NEC CORPORATION 1.48% 5490 End-of-day quote.21.46%
NIKKEI 225 -0.44% 22614.69 Real-time Quote.-3.98%
NXP SEMICONDUCTORS N.V. 0.51% 117.22 Delayed Quote.-8.43%
RENESAS ELECTRONICS CORPORATION 2.02% 607 End-of-day quote.-19.07%
THE ALLSTATE CORPORATION -1.30% 94.49 Delayed Quote.-14.95%
THE LEAD CO., INC. 1.68% 363 End-of-day quote.-6.92%
US DOLLAR / JAPANESE YEN (USD/JPY) 0.16% 107.566 Delayed Quote.-1.02%
WORLD CO., LTD. -1.00% 1580 End-of-day quote.-41.29%
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Financials
Sales 2020 675 B 6 267 M 6 267 M
Net income 2020 13 861 M 129 M 129 M
Net Debt 2020 550 B 5 100 M 5 100 M
P/E ratio 2020 48,5x
Yield 2020 -
Capitalization 1 041 B 9 684 M 9 661 M
EV / Sales 2019
EV / Sales 2020 2,36x
Nbr of Employees 18 780
Free-Float 47,1%
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Mean consensus OUTPERFORM
Number of Analysts 13
Average target price 760,00 JPY
Last Close Price 607,00 JPY
Spread / Highest target 113%
Spread / Average Target 25,2%
Spread / Lowest Target -19,3%
EPS Revisions
Managers
NameTitle
Hidetoshi Shibata President, CEO & Representative Director
Tetsuya Tsurumaru Chairman
Shuhei Shinkai Chief Finance Officer & Executive Officer
Shinichi Yoshioka Chief Technology Officer & Executive Officer
Tetsuro Toyoda Independent Non-Executive Outside Director
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