A government-backed fund is preparing to spend more than ￥180 billion (US$2.2 billion) for two-thirds of Renesas Electronics Corp as shareholders in the ailing Japanese chipmaker consider the deal, a person with knowledge of the plan said.
Renesas’s three biggest shareholders — Mitsubishi Electric Corp, NEC Corp and Hitachi Ltd — are close to agreeing on a stake sale to Innovation Network Corp of Japan (INCJ), the person said, asking not to be named because the negotiations are not public.
Eight companies, including Toyota Motor Corp, will invest a total of more than ￥10 billion for minority stakes under the arrangement, which could change before a formal announcement is made, the person said.
Renesas shares surged 17 percent on the plan, reported earlier yesterday by the Nikkei Shimbun, which said the deal will be announced next month.
The chipmaker, a supplier to Apple Inc and Nintendo Co, is cutting jobs and considering closing or selling plants to recover from losses as demand drops for its system LSI chips, used for functions including processing TV images.
The company would eliminate as many as 5,000 positions and shut more factories under INCJ’s proposal, the person said.
Renesas closed 17 percent higher at ￥337 in Tokyo trading, the biggest gain in two months.
Yesterday’s gain trimmed the decline of Renesas this year to 28 percent, compared with an 11 percent gain for Japan’s benchmark Nikkei 225 Stock Average.
Mitsubishi Electric, Hitachi and NEC — which together hold more than 90 percent of Renesas — will become minority shareholders after the investment, the Nikkei reported, without saying where it got the information. Mitsubishi will accept a few hundred workers under the agreement while NEC and Hitachi will pay Renesas about ￥1 billion each to fund an early-retirement plan, the report said.
INCJ’s purchase plan will be announced early next month, the Nikkei said.
The company was formed in 2009 to invest in companies that support Japanese industry.
Renesas is a key supplier to Japan’s automakers as the world’s largest maker of microcontrollers, with a 27 percent market share last year. It was formed in 2010 through the merger of money-losing chipmakers Renesas Technology Corp, a venture between Hitachi and Mitsubishi Electric and NEC Electronics Corp.
The manufacturer, which has 18 factories in Japan, employed 42,800 as of March 31, according to data compiled by Bloomberg.