Renesas Electronics Announces Absorption-Type Merger (Simplified/Short-Form Merger) With Consolidated Subsidiary and Debt

  Renesas Electronics Announces Absorption-Type Merger (Simplified/Short-Form
  Merger) With Consolidated Subsidiary and Debt Waiver

Business Wire

TOKYO -- July 28, 2014

Renesas Electronics Corporation (TSE: 6723, “Renesas Electronics”), a premier
provider of advanced semiconductor solutions, today announced that, under the
approval of Renesas Electronics' Board of Directors on July 28, 2014, it will
consolidate its subsidiary Renesas Mobile Corporation (“Renesas Mobile”)
through an absorption-type merger (“Merger”).

Since the Merger is an absorption-type merger of a wholly-owned subsidiary,
certain disclosure items and details have been omitted.

1. Purpose of Merger

Renesas Mobile was established in 2010 as a wholly-owned subsidiary of Renesas
Electronics that is principally engaged in the design of system-on-chip (SoC)
devices for use in mobile phones and car information systems (CIS). However,
as announced on March 12, 2013, Renesas Electronics has been considering a
variety of structural reform measures for the mobile business of Renesas
Mobile, and has implemented measures to withdraw from the 4G wireless
business.

As an important initiative among the structural reform measures currently
being undertaken by the company, Renesas Electronics has decided to execute an
absorption-type merger with Renesas Mobile with an aim of expanding its CIS
business in the automotive field, by concentrating resources involved in that
business within Renesas Electronics and to improve the company's ability to
develop solutions, while boosting the operational efficiency of that business
and strengthening the profit structure.

2. Summary of Merger

(1) Schedule of Merger

- Approval of Board of Directors regarding debt waiver to consolidated
subsidiary: July 28, 2014

- Approval of Board of Directors regarding the Merger: July 28, 2014

- Conclusion of merger agreement: July 28, 2014

- Date of Merger (effective date): October 1, 2014 (planned)

(Note) Renesas Electronics will follow the procedure for a simple
absorption-type merger as stipulated under Article 796, §3 of the Japan
Corporation Law, and Renesas Mobile will follow the procedure for a short-form
absorption-type merger as stipulated in Article 784, §1 of the Japan
Corporation Law, both of which do not require approval of the merger agreement
by a general meeting of shareholders.

(2) Method of Merger

The Merger will be conducted through an absorption-type merger method in which
Renesas Electronics will be the surviving company and Renesas Mobile will be
dissolved as the absorbed company.

Since Renesas Mobile presently has liabilities exceeding its assets, Renesas
Electronics plans to waive the debts owed by Renesas Mobile in advance of the
merger, thereby eliminating its state of insolvency before the merger takes
place.

- Debts to be waived: Loans and other accounts receivable

- Total value of debts to be waived: 38.9 billion yen (estimate)

- Implementation date: September 30, 2014 (planned)

(3) Distribution of Assets

Since Renesas Mobile is a wholly-owned subsidiary of Renesas Electronics,
there will be no stocks, money, etc. issued in connection with the Merger

(4) Share subscription rights and bonds with share subscription rights

No share subscription rights or bonds with share subscription rights are
issued.

2. Overview of parties to the Merger (as of March 31, 2014)

                        Renesas Electronics             Renesas Mobile
Company Name           Corporation (surviving         Corporation (absorbed
                        company)                        company)
                        1753 Shimonumabe,               Nippon Building,
(1) Address            Nakahara-ku, Kawasaki,         2-6-2, Ote-machi,
                        Kanagawa                        Chiyoda-ku, Tokyo
(2) Representative     Hisao Sakuta, Representative   Hideaki Chaki, CEO
                        Director, Chairman and CEO
                        Research, development,          Design of SoC devices,
                        design, manufacture, sale,      etc., for use
(3) Major Operations   and servicing of               primarily in mobile
                        semiconductor products          phones and car
                                                        information systems
(4) Capital            228,255 million yen            5,000 million yen
                        November 1, 2002 (started       September 1, 2010
(5) Established        operation on April 1, 2010)    (started operation on
                                                        December 1, 2010)
                        Innovation Network
                        Corporation of Japan: 69.15%

                        Japan Trustee Services Bank,
                        Ltd. (Re-trust of Sumitomo
(6) Major               Mitsui Trust Bank, Limited /
Stockholders and       NEC Corporation pension and    Renesas Electronics
Ownership Ratios        severance payments Trust        Corporation: 100%
                        Account): 8.11%

                        Hitachi, Ltd.: 7.66%

                        Mitsubishi Electric
                        Corporation: 6.26%
(7) Shares Issued      1,667,124,490                  100,000
(8) Fiscal Term        March 31                       March 31
(9) Consolidated Net   227,314 million yen            -40,915 million yen
Assets
(10) Consolidated Net  128.73 yen                     -409,151.60 yen
Assets per Share
(11) Consolidated      786,002 million yen            7,377 million yen
Total Assets
(12) Consolidated Net  833,011 million yen            45,779 million yen
Sales
(13) Consolidated
Operating Income       67,635 million yen             -4,250 million yen
(Loss)
(14) Consolidated
Ordinary Income        58,625 million yen             -5,699 million yen
(Loss)
(15) Consolidated Net  -5,291 million yen             -4,282 million yen
Income (Loss)
(16) Consolidated Net
Income (Loss) per      -5.07 yen                      -42,818.43 yen
Share

Note: Figures for Renesas Mobile listed above are not consolidated results as
Renesas Mobile does not prepare its own consolidated financial statement.

3. Situation Following the Merger

There will be no changes to the company name, business activities,
headquarters address, representative, capital, and end of fiscal year of
Renesas Electronics as a result of the merger.

4. Future Outlook

No major impact is anticipated on Renesas Electronics' consolidated and
non-consolidated financial results for the fiscal year ending March 31, 2015
as a result of the Merger

About Renesas Electronics Corporation

Renesas Electronics Corporation (TSE: 6723), the world’s number one supplier
of microcontrollers, is a premier supplier of advanced semiconductor solutions
including microcontrollers, SoC solutions and a broad range of analog and
power devices. Business operations began as Renesas Electronics in April 2010
through the integration of NEC Electronics Corporation (TSE:6723) and Renesas
Technology Corp., with operations spanning research, development, design and
manufacturing for a wide range of applications. Headquartered in Japan,
Renesas Electronics has subsidiaries in 20 countries worldwide. More
information can be found at www.renesas.com.

Contact:

Renesas Electronics Corporation
Kyoko Okamoto, +81 3-6756-5555
pr@renesas.com
 
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