About the Media Reports Regarding Renesas

31 Aug 2018

TOKYO, Japan, August 31, 2018— Nikkei Newspaper online reported today the potential acquisition of a U.S.-based semiconductor company by Renesas. The reports were not based on Renesas’ announcement. While Renesas is considering the reported acquisition to accelerate its business growth, no definitive decision has been reached. Renesas will make a prompt announcement if any material decisions are made.

In conducting corporate acquisitions, Renesas carefully selects candidates taking various aspects into account including: (1) product/market compatibility and complementarity; (2) market competitiveness and financial solidness of the candidate; and (3) feasibility of post-merger integration (PMI) with an aim to maximizing the business and shareholder values to be generated from the combined company.

In particular, the candidate’s products should have solid competitiveness in Renesas’ focus business fields as well as complementarity to Renesas’ core products including microcontrollers (MCUs) and system-on-chips (SoC) to enable synergy generation in the long-run. Additionally, the target is expected to further strengthen Renesas Group’s financial profile (gross margin improvement and shareholder value accretion) immediately after the acquisition. One other decisive factor will be the compatibility and commonality of management policies and business operations, which enable unified business management of the combined company post acquisition.

In the event that financing is required, Renesas determines a structure with optimal financing cost. At the same time, by taking into account cash generation capability of the combined company, Renesas will take a disciplined approach in maintaining a financial healthiness.

With regard to the recent acquisition of Intersil Corporation completed in February 2017, integration initiatives such as integration of (1) management team and organization, (2) corporate / product brands, and (3) global sites including sales offices, were completed.  Moreover, synergy from the integration has far exceeded the initial target (annual run-rate of US$170 million made up of both topline growth from acquisition of new businesses through cross-sell and solution development, and cost savings from elimination of overlapping functions and leveraging greater business platform).