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 email@example.com
Renesas Electronics Announces Absorption-Type Merger (Simplified/Short-Form Merger) With Consolidated Subsidiary and Debt
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