Japan Said to Plan 200 Billion Yen Rescue of Renesas

Renesas Soars as Japan Said Making $2.5 Billion Bid
An employee works in a clean room on the production line for 200mm wafers at Renesas Electronics Corp.'s Naka plant in Hitachinaka city, Ibaraki prefecture, Japan. Photographer: Tomohiro Ohsumi/Bloomberg

Renesas Electronics Corp., the world’s largest microcontroller maker, rose the most in three weeks in Tokyo trading after two people familiar with the matter said it may be acquired for 200 billion yen ($2.5 billion).

The chip supplier to companies including Apple Inc. and Toyota Motor Corp. climbed 14 percent, the biggest gain since Sept. 24, to 302 yen, as of the close of trading in Tokyo. Innovation Network Corp. of Japan, a state-backed fund, may be joined by private companies to take over Renesas as early as next month, the two people said Oct. 13, asking not to be identified because the discussions are private.

Renesas has rebounded 48 percent after dropping to a record low of 204 yen on May 29, boosted by funding from shareholders and reports that it may be acquired. The chipmaker has recorded cumulative losses of 472 billion yen in the seven years through March 31, according to data compiled by Bloomberg, hurt by a slowdown in global chip demand.

Renesas isn’t the source of information on the reported acquisition, Yoichi Kobayashi, a spokesman for Renesas, said by telephone today.

Innovation Network will inject 150 billion yen in return for two-thirds of Renesas’s shares, and a group of about 10 companies will invest about 50 billion yen in total, the Nikkei newspaper said Oct. 13.

Renesas, projecting a 156 billion yen net loss this fiscal year, has cut 7,500 jobs, or about 17 percent of its workforce, to reduce costs. It may also close or sell plants as demand declines for its system LSI chips, used for functions including processing images for televisions.

Toyota, Panasonic Corp., Nissan Motor Co. and Denso Corp. are among those involved with Innovation Network’s possible bid, according to one of the people familiar with the talks.

Joichi Tachikawa, a Toyota spokesman, today declined to comment on the reported acquisition of Renesas, saying it is based on speculation.

Renesas held a 27 percent share of the global microcontroller market last year, making it the world’s largest supplier of the devices used in automobiles and televisions.

The company in its current form was established in 2010 through the merger of money-losing chipmakers NEC Electronics Corp. and Renesas Technology Corp., a venture between Hitachi Ltd. and Mitsubishi Electric.

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