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Renesas Shares Drop on Report It May Consolidate Plants

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May 23 (Bloomberg) -- Renesas Electronics Corp. fell the most in more than a year in Tokyo trading as a Nikkei newspaper report prompted speculation the world’s biggest automotive microcontroller maker may struggle to return to profit.

The chipmaker dropped as much as 15 percent, the biggest decline since March 2011, to 246 yen before trading at 264 yen as of 11:15 a.m. on the Tokyo Stock Exchange.

Renesas expects to announce plans by July to cut jobs and consolidate plants after posting a loss last fiscal year on slumping sales of its system chips used in digital appliances, the Nikkei reported, without saying where it got the information. The Kawasaki city, Japan-based company’s largest shareholders are NEC Corp., Hitachi Ltd. and Mitsubishi Electric Corp.

“It would be hard for investors to buy companies that are having a hard time getting out of an unprofitable structure,” Makoto Sengoku, a Tokyo-based market analyst at Tokai Tokyo Securities Co., said by phone.

To contact the reporter on this story: Naoko Fujimura in Tokyo at nfujimura@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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