May 18, 2017

TOKYO, Japan, May 18, 2017 ― Renesas Electronics Corporation (TSE:6723, “Renesas”) today announced that it has resolved, at the Board of Directors’ meeting held on May 18, 2017, matters relating to a secondary offering of shares of common stock of Renesas as set forth below.

1. Secondary offering of shares of Renesas (Japanese Secondary Offering by way of Underwriting and Purchase and International Secondary Offering)

(1) Class and Number of Shares to be Sold 403,148,000 shares of common stock of Renesas, which is the sum of (i) through (iii) below.
  • (i) 128,566,500 shares of common stock of Renesas to be underwritten and purchased by the Japanese underwriters in the Japanese Secondary Offering by way of Underwriting and Purchase as described in (3)(i) below.
  • (ii) 238,766,600 shares of common stock of Renesas to be underwritten and purchased by the international underwriters in the International Secondary Offering as described in (3)(ii) below.
  • (iii) A maximum of 35,814,900 shares of common stock of Renesas, which will be subject to the option to be granted to the international underwriters in the International Secondary Offering as described in (3)(ii) below for purchase of additional shares of common stock of Renesas.
(2) Sellers and Number of Shares to be Sold

(i) Shares to be underwritten and purchased by the Japanese underwriters in the Japanese Secondary Offering by way of Underwriting and Purchase as described in (1)(i) above:

  • Innovation Network Corporation of Japan     111,191,100 shares
  • NEC Corporation     6,760,300 shares
  • Hitachi, Ltd.     5,838,300 shares
  • Mitsubishi Electric Corporation     4,776,800 shares

(ii) Shares to be underwritten and purchased by the international underwriters in the International Secondary Offering as described in (1)(ii) above:

  • Innovation Network Corporation of Japan     206,497,700 shares
  • Hitachi, Ltd.     10,842,700 shares
  • Mitsubishi Electric Corporation     8,871,300 shares
  • Japan Trustee Services Bank, Ltd. (Re-trust of Sumitomo Mitsui Trust Bank, Limited / NEC Corporation pension and severance payments Trust Account)     6,719,343 shares
  • NEC Corporation     5,835,557 shares

(iii) Maximum number of shares of common stock of Renesas, which will be subject to the option to be granted to the international underwriters in the International Secondary Offering for purchase of additional shares as described in (1)(iii) above:

  • Japan Trustee Services Bank, Ltd. (Re-trust of Sumitomo Mitsui Trust Bank, Limited / NEC Corporation pension and severance payments Trust Account)     13,934,600 shares
  • Hitachi, Ltd.     12,034,200 shares
  • Mitsubishi Electric Corporation     9,846,100 shares
(3) Method of Secondary Offering The secondary offerings will be concurrently conducted in Japan and overseas.
  • (i) Japanese Secondary Offering by way of Underwriting and Purchase:
    The Japanese secondary offering will be a secondary offering conducted in Japan(the “Japanese Secondary Offering by way of Underwriting and Purchase”), whereby the Japanese underwriters shall underwrite and purchase all of the shares related to the Japanese Secondary Offering by way of Underwriting and Purchase.
  • (ii) International Secondary Offering:
    The international secondary offering will be a secondary offering conducted in overseas markets (in the United States, restricted to sales to qualified institutional buyers pursuant to Rule 144A under the U.S. Securities Act of 1993, as amended) (the “International Secondary Offering”), whereby the international underwriters (together with the Japanese underwriters, the “Underwriters”), shall, severally and not jointly, underwrite and purchase all of the shares related to the International Secondary Offering. In addition, the sellers mentioned in (2)(iii) above, will grant the international underwriters the option to purchase additional shares of common stock of Renesas.
The total number of shares to be sold in the Japanese Secondary Offering by way of Underwriting and Purchase and the International Secondary Offering will be 403,148,000 shares, and the number of shares to be sold in the Japanese Secondary Offering by way of Underwriting and Purchase is planned to be 128,566,500 shares and the number of shares to be sold in the International Secondary Offering is planned to be 274,581,500 shares (the sum of 238,766,600 shares to be underwritten and purchased by the international underwriters as mentioned in (1)(ii) above and 35,814,900 shares, which will be subject to the option to be granted to the international underwriters for purchase of additional shares of common stock of Renesas as mentioned in (1)(iii) above), although the final breakdown of the actual number of shares shall be determined on the Determination Date mentioned in (4) below by taking into account market demand and other conditions.
(4) Selling Price The selling price is currently undecided, but shall be determined on a date during the period from Monday, June 12, 2017 to Wednesday, June 14, 2017 (the “Determination Date”), based on the tentative selling price to be presented on Wednesday, May 31, 2017, in accordance with the method stated in Article 25 of the Regulations concerning Underwriting of Securities, etc. of the Japan Securities Dealers Association, taking into account market demand and other conditions.
(5) Compensation for the Underwriters Renesas shall not pay any underwriting commissions to the Underwriters. However, the aggregate amount of the difference between (a) the selling price and (b) the purchase price to be paid to the sellers by the Underwriters in each offering shall constitute proceeds to the Underwriters.
(6) Subscription Period (for the Japanese offering) The subscription period shall be from the business day immediately following the Determination Date to the second business day immediately following the Determination Date.
(7) Delivery Date The delivery date shall be a day during the period from Tuesday, June 20, 2017 to Thursday, June 22, 2017, which is the sixth business day immediately following the Determination Date.
(8) Subscription Deposit The subscription deposit shall be the same as the selling price per share.
(9) Subscription Unit 100 shares
(10) In addition to the matters set forth above, determination and approval of the matters required for the Japanese Secondary Offering by way of Underwriting and Purchase and the International Secondary Offering shall be delegated to the Representative Directors or the Executive Vice President and CFO.

2. Secondary offering of shares of Renesas (secondary offering by way of over-allotment) (See Reference 2.below.)

(1) Class and Number of Shares to be Sold 19,284,900 shares of common stock of Renesas (maximum)
The number of shares mentioned above is the maximum number of shares to be sold. The above number may decrease, or the secondary offering by way of over-allotment may be cancelled entirely, depending on market demand and other conditions of the Japanese Secondary Offering by way of Underwriting and Purchase. The final number of shares to be sold shall be determined on the Determination Date, taking into account market demand and other conditions of the Japanese Secondary Offering by way of Underwriting and Purchase.
(2) Seller The designated Japanese underwriter
(3) Method of Secondary Offering Taking into account market demand and other conditions of the Japanese Secondary Offering by way of Underwriting and Purchase, the designated Japanese underwriter will make a secondary offering in Japan of up to 19,284,900 shares of common stock of Renesas, which it will borrow from the shareholders of Renesas.
(4) Selling Price The selling price is currently undecided, but will be determined on the Determination Date; provided, however, that such selling price shall be the same as the selling price in the Japanese Secondary Offering by way of Underwriting and Purchase.
(5) Subscription Period The subscription period shall be the same as the subscription period in respect of the Japanese Secondary Offering by way of Underwriting and Purchase.
(6) Delivery Date The delivery date shall be the same as the delivery date in respect of the Japanese Secondary Offering by way of Underwriting and Purchase.
(7) Subscription Deposit The subscription deposit shall be the same as the selling price per share.
(8) Subscription Unit 100 shares
(9) In addition to the matters set forth above, determination and approval of the matters required for the secondary offering by way of over-allotment shall be delegated to the Representative Directors or the Executive Vice President and CFO.

Reference

1. Purpose of the secondary offering of shares

Renesas expects an expansion of the investor base and improvement of liquidity are expected through these secondary offerings.

2. Secondary offering by way of over-allotment

The secondary offering by way of over-allotment as explained in “2. Secondary offering of shares of Renesas (secondary offering by way of over-allotment)” above is a secondary offering by the designated Japanese underwriter of shares of common stock of Renesas in Japan to be conducted in connection with the Japanese Secondary Offering by way of Underwriting and Purchase as stated in “1. Secondary offering of shares of Renesas (Japanese Secondary Offering by way of Underwriting and Purchase and International Secondary Offering)” above, taking into account market demand and other conditions, with up to 19,284,900 shares of common stock of Renesas (the “Borrowed Shares”) borrowed from the shareholders of Renesas. The number of shares to be sold in the secondary offering by way of over-allotment is the maximum number thereof, and such number may decrease or the secondary offering by way of over-allotment may be canceled entirely, depending on market demand and other conditions.

In the event that the secondary offering by way of over-allotment is conducted, the designated Japanese underwriter will be granted by the aforementioned shareholders of Renesas, the rights to purchase additional shares of common stock of Renesas (the “Green Shoe Option”), up to the number of shares in the secondary offering by way of over-allotment, during an exercise period from the delivery date of the Japanese Secondary Offering by way of Underwriting and Purchase and the secondary offering by way of over-allotment to Tuesday, June 27, 2017 (the “Exercise Period”).

The designated Japanese underwriter may, during the subscription period for the Japanese Secondary Offering by way of Underwriting and Purchase and the secondary offering by way of over-allotment (the “Subscription Period”), conduct stabilizing transactions in relation to the shares of common stock of Renesas, and the shares purchased through such stabilizing transactions may be used, in whole or in part, to return the Borrowed Shares.

The designated Japanese underwriter may also purchase shares of common stock of Renesas on the Tokyo Stock Exchange, Inc., up to the number of shares in the secondary offering by way of over-allotment (the “Syndicate Cover Transactions”) during the period from (a) the day immediately following the last day of the Subscription Period to (b) Tuesday, June 27, 2017 (the “Syndicate Cover Transaction Period”), and all of the shares purchased through the Syndicate Cover Transactions will be used to return the Borrowed Shares. During the Syndicate Cover Transaction Period, the designated Japanese underwriter may cancel the Syndicate Cover Transactions entirely or may terminate the Syndicate Cover Transactions before the number of shares purchased reaches the number of shares to be sold in the secondary offering by way of over-allotment, in its own discretion.

The residual portion of the Borrowed Shares after the returning of shares by using the shares acquired through Syndicate Cover Transactions and/or stabilizing transactions will be returned by designated Japanese underwriter through its exercise of the Green Shoe Option. The transactions stated above will be made by the designated Japanese underwriter after consultation with the joint lead managers of the Japanese Secondary Offering by way of Underwriting and Purchase.

3. Lock-up

In connection with the Japanese Secondary Offering by way of Underwriting and Purchase and the International Secondary Offering, Innovation Network Corporation of Japan, which is the seller in the Japanese Secondary Offering by way of Underwriting and Purchase and International Secondary Offering, will agree with the joint global coordinators not to conduct a sale, etc. of the shares of Renesas, securities convertible or exchangeable for shares of Renesas, or securities that represent rights to acquire or receive shares of Renesas (excluding the Japanese Secondary Offering by way of Underwriting and Purchase and the International Secondary Offering, etc.), for a period commencing on the Determination Date and ending on the date 180 calendar days from and including the delivery date of the relevant offerings (the “Lock-up Period”), without the prior written consent of the joint global coordinators (which consent shall not be unreasonably withheld or delayed).

In addition, Hitachi, Ltd., Mitsubishi Electric Corporation and Japan Trustee Services Bank, Ltd. (Re-trust of Sumitomo Mitsui Trust Bank, Limited / NEC Corporation pension and severance payments Trust Account), which are the sellers in the Japanese Secondary Offering by way of Underwriting and Purchase and International Secondary Offering, and Toyota Motor Corporation, DENSO Corporation, Canon Inc. and Panasonic Corporation which are the shareholders of Renesas, will agree with the joint global coordinators not to conduct a sale, etc. of the shares of Renesas, securities convertible or exchangeable for shares of Renesas, or securities that represent rights to acquire or receive shares of Renesas (excluding the Japanese Secondary Offering by way of Underwriting and Purchase and the International Secondary Offering, etc.), for the Lock-up Period, without the prior written consent of the joint global coordinators.

Renesas will also agree with the joint global coordinators not to conduct an issuance, etc. of the shares of Renesas, securities convertible or exchangeable for shares of Renesas, or securities that represent rights to acquire or receive shares of Renesas (excluding the issuance of new shares in relation to a stock split and the issuance of new shares upon the exercise of certain subscription rights to shares, etc.), for the Lock-up Period, without the prior written consent of the joint global coordinators.

In either of the aforementioned cases, the joint global coordinators have the authority to wholly or partially cancel the relevant agreements at their discretion, even during the Lock-up Period.

About Renesas Electronics Corporation

Renesas Electronics Corporation (TSE: 6723) delivers trusted embedded design innovation with complete semiconductor solutions that enable billions of connected, intelligent devices to enhance the way people work and live. A global leader in microcontrollers, analog, power, and SoC products, Renesas provides comprehensive solutions for a broad range of automotive, industrial, infrastructure, and IoT applications that help shape a limitless future. Learn more at renesas.com. Follow us on LinkedIn, Facebook, Twitter, and YouTube.

(FORWARD-LOOKING STATEMENTS)

The statements in this press release with respect to the plans, strategies and forecasts of Renesas and its consolidated subsidiaries (collectively “we”) are forward-looking statements involving risks and uncertainties. Such forward-looking statements do not represent any guarantee by management of future performance. In many cases, but not all, we use such words as “aim,” “anticipate,” “believe,” “continue,” “endeavor,” “estimate,” “expect,” “initiative,” “intend,” “may,” “plan,” “potential,” “probability,” “project,” “risk,” “seek,” “should,” “strive,” “target,” “will” and similar expressions to identify forward-looking statements. You can also identify forward-looking statements by discussions of strategy, plans or intentions. These statements discuss future expectations, identify strategies, contain projections of our results of operations or financial condition, or state other forward-looking information based on our current expectations, assumptions, estimates and projections about our business and industry, our future business strategies and the environment in which we will operate in the future. Known and unknown risks, uncertainties and other factors could cause our actual results, performance or achievements to differ materially from those contained or implied in any forward-looking statement, including, but not limited to: general economic conditions in our markets, which are primarily Japan, North America, Asia and Europe; demand for, and competitive pricing pressure on, our products and services in the marketplace; our ability to continue to win acceptance of its products and services in these highly competitive markets; and movements in currency exchange rates, particularly the rate between the yen and the U.S. dollar. Among other factors, a worsening of the world economy, a worsening of financial conditions in the world markets, and a deterioration in the domestic and overseas stock markets, would cause actual results to differ from the projected results forecast.

This press release is based on the economic, regulatory, market and other conditions as in effect on the date hereof. It should be understood that subsequent developments may affect the information contained in this presentation, which neither we nor our advisors or representatives are under an obligation to update, revise or affirm.

(Remarks) All registered trademarks or trademarks are the property of their respective owners.

Note:
This press release has been prepared for the purpose of announcing to the public certain matters relating to the secondary offering of shares of Renesas Electronics Corporation, and not for the purpose of soliciting investment or engaging in any other similar activities within or outside Japan. Investors should review the prospectus, as well as amendments thereto, prepared by Renesas prior to making any investment decisions in Japan, and should make such decisions at their own discretion. In addition, this press release does not constitute an offer or sale of securities in the United States. The securities referred to above have not been, and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act"). The securities may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act. The securities referred to above will not be publicly offered or sold in the United States.


The content in the press release, including, but not limited to, product prices and specifications, is based on the information as of the date indicated on the document, but may be subject to change without prior notice.

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