In a few short weeks, Dialog Semiconductor has gone from being regulated in London to Berlin and, possibly, now Tokyo, as it is discussions to be acquired by Renesas Electronics in a $6bn deal.
The company on Sunday confirmed it is in advanced discussions with Renesas regarding the possible all cash offer of €67.50 per share, which would value the company at €4.9bn ($5.9bn).
This follows the Renesas acquisition of IDT in 2019 and data centre and automotive power specialist Intersil in 2018, where the technologiesd have been combined into 210 reference designs aimed at vertical application in industrial, infrastructure, automotive, and consumer markets.
The acquisition of Dialog would add industrial and consumer programmable power, including contracts with Apple, as well low power Bluetooth wireless and industrial networking and memory technology from its own acquisition of Adesto in 2020. Renesas is already the largest supplier of industrial microcontrollers with the controller ranges from Hitachi and Mitsubishi Electric and its own proprietary and ARM-based devices. But it is the low power technology that it wants.
Whether there is enough value in the remains to be seem. Renesas sees $200m value in cross selling after two years, and $125m in backend cost reductions. “All these systems complement and expand Renesas’ leadership portfolio in delivering comprehensive solutions to improve performance and efficiency in high-computing electronic systems,” said Renesas. “The acquisition of these low-power technologies enhances Renesas’ product portfolio and expands horizons in addressing high-growth markets in the IoT field.”
“There can be no certainty that any firm offer will be made for the Company, nor as to the terms on which any firm offer might be made,” said a statement. Under the rules of the German regulator, Renesas now has until 5pm (London time) on 7th March 2021 to announce a firm intention to make an offer for the company.
That commitment came on Monday morning.
“The transaction we announced today represents our next important step in catapulting Renesas’ growth plan to achieve substantial strategic and financial benefits, following our previous acquisitions,” said Hidetoshi Shibata, President and CEO of Renesas. “Dialog has a strong culture of innovation along with excellent customer relationships and serves fast growing areas including IoT, industrial and automotive. By bringing Dialog’s talented team and expertise into Renesas, together, we will accelerate innovation for customers and create sustainable value for our shareholders.”
“For several years, we have successfully executed on a diversification strategy that positions Dialog for high-growth,” said Dr. Jalal Bagherli, CEO of Dialog. “We have built a strong foundation of high-performance analog and power efficient mixed-signal expertise, extended our product portfolio and applied our technologies into markets including 5G, wearables, automotive, smart home, connected medical and industrial IoT. This compelling platform – combined with Renesas’ leading embedded compute, analog and power portfolio – creates even greater growth opportunities in today’s increasingly connected world. The Dialog team is excited to join forces with Renesas. The combined company will be in an even stronger position to provide innovative products for these markets, building on Renesas’ extensive sales, distribution and customer support capabilities.”
The transaction has been unanimously approved by the boards of directors of both companies and is expected to close by the end of calendar year 2021 and is structured as a court-approved scheme of arrangement under the UK Companies Act 2006. Completion of the transaction is subject to approval by Dialog shareholders as well as regulatory approvals.
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