May 28, 2021

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

[Purpose of the Funding and the Secondary Offering of Shares]

In order to achieve further growth, Renesas has been striving to expand and strengthen its product portfolio and necessary technologies through both organic (expanding and strengthening existing businesses) and inorganic (utilizing strategic alliances with other companies, acquisitions, etc.) approaches.

To further accelerate these consistent growth strategies, in February 2021, Renesas and Dialog Semiconductor Plc (CEO: Jalal Bagherli; “Dialog”), a UK.-headquartered analog semiconductor supplier, reached an agreement on the acquisition by Renesas of the entire issued and to be issued share capital of Dialog (the “Acquisition”, announced on February 8, 2021 as the press release titled “Agreement on Commencement of Acquisition Procedure to Make Dialog Semiconductor Plc a Wholly-owned Subsidiary”), the total value of which is approximately EUR 4.9 billion (approximately 615.7 billion yen).

The board of directors of Renesas unanimously approved the Acquisition. In addition, the board of directors of Dialog unanimously recommended the Dialog shareholders accept the offer. The Acquisition was also approved and resolved by the Dialog shareholders at the Dialog general meeting and the court meeting by the requisite majorities on April 9, 2021. The Acquisition is expected to close by the end of calendar year 2021, subject to, among other things, the sanction by the UK court and regulatory approvals from the relevant countries.

The proceeds from the issuance of new shares will be used in full to fund a part of the purchase price for the Acquisition. The issuance of new shares and the Acquisition will enable Renesas to maintain a strong financial base that will enable Renesas to execute its future growth strategy, while acquiring Dialog’s technology assets in analog semiconductors.

In addition, the secondary offering of shares of Renesas will be conducted by INCJ, Ltd. concurrently with the issuance of new shares through the Japanese Public Offering and the International Offering (each as defined below).

1. Issuance of new shares through the Japanese Public Offering and the International Offering

(1)
Class and Number of Shares to be Offered

196,417,200 shares of common stock of Renesas, which is the sum of (i) through (iii) below.

(i) 36,373,600 shares of common stock of Renesas to be underwritten and purchased by the Japanese underwriters in the Japanese Public Offering as described in (4)(i) below.

(ii) 145,494,200 shares of common stock of Renesas to be underwritten and purchased by the international managers in the International Offering as described in (4)(ii) below.

(iii) A maximum of 14,549,400 shares of common stock of Renesas, which will be subject to the option to be granted to the international managers in the International Offering as described in (4)(ii) below for purchase of additional shares of common stock of Renesas.

(2)
Method of Determination of Amount to be Paid

The amount to be paid will be determined on a day (the “Determination Date”) during the period from June 9, 2021 to June 11, 2021 in accordance with the method stated in Article 25 of the Regulations concerning Underwriting of Securities, etc. of the Japan Securities Dealers Association.

(3)
Amount of Share Capital and Legal Capital Surplus to be Increased

The amount of share capital to be increased shall be half of the maximum amount of the share capital increase, as calculated in accordance with Article 14, Paragraph 1 of the Regulation on Corporate Accounting with any fraction less than one yen resulting from the calculation being rounded up to the nearest yen. The amount of legal capital surplus to be increased shall be the amount obtained by subtracting the amount of share capital to be increased from the maximum amount of the share capital increase.

(4)
Method of Offering

The offerings will be concurrently conducted in Japan and overseas.

(i) Japanese Public Offering:
The offering in Japan will be a public offering conducted in Japan (the “Japanese Public Offering”), whereby the Japanese underwriters shall underwrite and purchase all of the shares related to the Japanese Public Offering.

(ii) International Offering:
The international offering will be an 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 Offering”), whereby the international managers (together with the Japanese underwriters, the “Underwriters”) shall, severally, but not jointly, purchase all of the shares related to the International Offering. In addition, Renesas will grant the international managers the option to purchase additional shares of common stock of Renesas as mentioned in (1)(iii) above.

The total number of shares to be offered in the Japanese Public Offering and the International Offering will be 196,417,200 shares, and the number of shares to be offered in the Japanese Public Offering is planned to be 36,373,600 shares and the number of shares to be offered in the International Offering is planned to be 160,043,600 shares (the sum of 145,494,200 shares to be underwritten and purchased by the international managers as mentioned in (1)(ii) above and 14,549,400 shares, which will be subject to the option to purchase additional shares of common stock of Renesas to be issued as mentioned in (1)(iii) above), although the final breakdown of the actual number of shares shall be determined on the Determination Date by taking into account market demand and other conditions.

Moreover, the issue price (offer price) with respect to each offering mentioned in (i) and (ii) above shall be determined on the Determination Date based on the tentative issue price (offer price) calculated by multiplying the closing price in ordinary market transactions of the shares of common stock of Renesas on the Tokyo Stock Exchange, Inc. on the Determination Date (or, if no closing price is quoted on such date, the closing price of the immediately preceding date) by 0.90-1.00 (with any fraction less than one yen being rounded down to the nearest yen), 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)
Commissions for the Underwriters

Renesas shall not pay any underwriting commissions to the Underwriters in respect of the Japanese Public Offering and the International Offering. However, the aggregate amount of the difference between (a) the issue price (offer price) and (b) the amount to be paid to us by the Underwriters in each offering shall constitute proceeds to the Underwriters.

(6)
Subscription Period (for the Japanese Public 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)
Payment Date

The payment date shall be a day during the period from June 15, 2021 to June 17, 2021, which is the fourth business day immediately following the Determination Date.

(8)
Deposit for Subscription

The amount of the deposit for subscription shall be same as the issue price (offer price) per share.

(9)
Subscription Unit

100 shares

(10)

Determination of the amount to be paid, the amount of share capital and legal capital surplus to be increased, the issue price (offer price) and all other matters required for the issuance of new shares through the Japanese Public Offering and the International Offering shall be delegated to the Representative Director or the Senior Vice President and CFO.

 

2. 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

167,078,400 shares of common stock of Renesas, which is the sum of (i) through (iii) below.

(i) 30,940,400 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) 123,761,800 shares of common stock of Renesas to be underwritten and purchased by the international managers in the International Secondary Offering as described in (3)(ii) below.

(iii) A maximum of 12,376,200 shares of common stock of Renesas, which will be subject to the option to be granted to the international managers in the International Secondary Offering as described in (3)(ii) below for purchase of additional shares of common stock of Renesas.

(2)
Seller

INCJ, Ltd.

(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 managers, shall, severally, but not jointly, underwrite and purchase all of the shares related to the International Secondary Offering. In addition, the seller mentioned in (1)(iii) above, will grant the international managers 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 167,078,400 shares, and the number of shares to be sold in the Japanese Secondary Offering by way of Underwriting and Purchase is planned to be 30,940,400 shares and the number of shares to be sold in the International Secondary Offering is planned to be 136,138,000 shares (the sum of 123,761,800 shares to be underwritten and purchased by the international managers as mentioned in (1)(ii) above and 12,376,200 shares, which will be subject to the option to be granted to the international managers 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 by taking into account market demand and other conditions.

(4)
Selling Price

The selling price is currently undecided, but shall be determined on the Determination Date; provided, however, that such selling price shall be same as the issue price (offer price) in the Japanese Public Offering and the International Offering.

(5)
Commissions 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 seller by the Underwriters in each offering shall constitute proceeds to the Underwriters.

(6)

Subscription Period (for the Japanese Secondary Offering)

The subscription period shall be the same subscription period as that of the Japanese Public Offering.

(7)
Delivery Date

The delivery date shall be the business day immediately following the payment date in respect of the Japanese Public Offering.

(8)
Deposit for Subscription

The amount of the deposit for subscription shall be same as the selling price per share.

(9)
Subscription Unit

100 shares

(10)

Approval of the selling price and all other matters required for the Japanese Secondary Offering by way of Underwriting and Purchase and the International Secondary Offering shall be delegated to the Representative Director or the Senior Vice President and CFO.

 

3. Secondary offering of shares of Renesas (secondary offering by way of over-allotment) (See <Reference> 1. below.)

(1)
Class and Number of Shares to be Sold

6,731,300 shares of common stock of Renesas

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 Public Offering and 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 Public Offering and 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 Public Offering and the Japanese Secondary Offering by way of Underwriting and Purchase, the designated Japanese underwriter will make a secondary offering in Japan of up to 6,731,300 shares of common stock of Renesas, which it will borrow from the shareholder of Renesas.

(4)
Selling Price

The selling price is currently undecided, but shall be determined on the Determination Date; provided, however, that such selling price shall be same as the issue price (offer price) in the Japanese Public Offering and the International Offering.

(5)
Subscription Period

The subscription period shall be the same subscription period as that of the Japanese Public Offering.

(6)
Delivery Date

The delivery date shall be the business day immediately following the payment date in respect of the Japanese Public Offering.

(7)
Deposit for Subscription

The amount of the deposit for subscription shall be same as the selling price per share.

(8)
Subscription Unit

100 shares

(9)

Approval of the selling price and all other matters required for the secondary offering by way of over-allotment shall be delegated to the Representative Director or the Senior Vice President and CFO.

 

4. Issuance of new shares by way of third-party allotment (See 1. of <Reference> below.)

(1)

Class and Number of Shares to be Offered

3,637,300 shares of common stock of Renesas

(2)
Method of Determination of Amount to be Paid

The amount to be paid will be determined on the Determination Date; provided, however, that such amount to be paid shall be the same as the amount to be paid in the Japanese Public Offering and the International Offering.

(3)
Amount of Share capital and Legal capital surplus to be Increased

The amount of share capital to be increased shall be half of the maximum amount of the share capital increase, as calculated in accordance with Article 14, Paragraph 1 of the Regulation on Corporate Accounting with any fraction less than one yen resulting from the calculation being rounded up to the nearest yen. The amount of legal capital surplus to be increased shall be the amount obtained by subtracting the amount of share capital to be increased from the maximum amount of the share capital increase.

(4)
Allottee

The designated Japanese underwriter

(5)
Subscription Date

June 25, 2021

(6)
Payment Date

June 28, 2021

(7)
Subscription Unit

100 shares

(8)

Any share not subscribed by the Subscription Date mentioned in (5) above shall not be issued.

(9)

Determination of the amount to be paid, the amount of share capital and legal capital surplus to be increased and all other matters required for the issuance of new shares by way of third-party allotment shall be delegated to the Representative Director or the Senior Vice President and CFO.

(10)

The issuance of new shares by way of third-party allotment shall be conditioned upon the securities registration statement filed under the Financial Instruments and Exchange Act of Japan becoming effective.

 

<Reference>

1. Secondary offering by way of over-allotment

The secondary offering by way of over-allotment as explained in “3. 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 Public Offering as stated in “1. Issuance of new shares through the Japanese Public Offering and the International Offering” and the Japanese Secondary Offering by way of Underwriting and Purchase as stated in “2. 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 6,731,300 shares of common stock of Renesas borrowed from the shareholder of Renesas (the “Borrowed Shares”). 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 cancelled entirely, depending on market demand and other conditions.

In connection with the secondary offering by way of over-allotment, Renesas has resolved, at the Board of Directors’ meeting held on May 28, 2021, an issuance of 3,637,300 shares of its common stock to the designated Japanese underwriter by way of third-party allotment (the “Third-Party Allotment”), with the payment date set to be June 28, 2021.

Furthermore, in connection with the secondary offering by way of over-allotment, the designated Japanese underwriter will be granted by the aforementioned shareholder of Renesas, the right to purchase additional shares of common stock of Renesas (the “Green Shoe Option”), up to 3,094,000 shares, during an exercise period from the delivery date of the Japanese Public Offering and the International Offering, together with the Japanese Secondary Offering by way of Underwriting and Purchase and the International Secondary Offering and the secondary offering by way of over-allotment (collectively referred to as the “Global Offering.”) to June 23, 2021.

The designated Japanese underwriter may, during the subscription period for the Japanese Public Offering, 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) June 23, 2021 (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.

With respect to the number of shares obtained by deducting (i) the number of shares to be purchased through stabilizing transactions and the Syndicate Cover Transactions, which will be used to return the Borrowed Shares from (ii) the number of shares for the secondary offering by way of over-allotment, the designated Japanese underwriter will exercise the Green Shoe Option and apply for subscription for the shares to be allotted by way of the Third-Party Allotment, in proportion to the ratio of the number of shares under the Japanese Public Offering to the number of shares under the Japanese Secondary Offering by way of Underwriting and Purchase.

Accordingly, all or a part of the shares of common stock of Renesas to be issued through the Third-Party Allotment may not be subscribed for, which may result in a decrease in the determined number of shares to be issued through the Third-Party Allotment, or in the cancellation of the entire issuance, due to forfeiture of the right to subscribe.

Whether the secondary offering by way of over-allotment is conducted or not and how many shares are sold in the secondary offering by way of over-allotment will be determined on the Determination Date. In cases where the secondary offering by way of over-allotment is not conducted, the designated Japanese underwriter will not borrow shares of common stock of Renesas from the above shareholder, the Green Shoe Option will not be granted by such shareholder, and the Syndicate Cover Transactions on the Tokyo Stock Exchange, Inc. will not be conducted. In such case, as the designated Japanese underwriter will not apply for subscription for the Third-Party Allotment, the issuance of the shares of common stock of Renesas through the Third-Party Allotment will be entirely cancelled, due to forfeiture of the right to subscribe.

The transactions stated above will be made by the designated Japanese underwriter after consultation with the joint lead managers of the Japanese Public Offering and the Japanese Secondary Offering by way of Underwriting and Purchase.

2. Total number of issued shares before and after the issuance of new shares through the Japanese Public Offering and the International Offering and the issuance of new shares by way of the Third-Party Allotment

(1)

Current total number of issued shares:

1,733,293,790
shares

(as of April 30, 2021)
(Note 1)
(2)

Number of shares to be increased by the issuance of new shares through the Japanese Public Offering and the International Offering:

196,417,200
shares

(Note 2)
(3)

Total number of issued shares after the issuance of new shares through the Japanese Public Offering and the International Offering:

1,929,710,990
shares

(Note 2)
(4)

Number of shares to be increased by the issuance of new shares by way of the Third-Party Allotment:

3,637,300
shares

(Note 3)
(5)

Total number of issued shares after the issuance of new shares by way of the Third-Party Allotment:

1,933,348,290
shares

(Note 3)

(Notes)

  1. As Renesas has issued stock acquisition rights, “Current total number of issued shares” refers to the total number of issued shares as of April 30, 2021.
  2. The numbers of shares are based on the assumption that the option set forth in (1)(iii) of “1. Issuance of new shares through the Japanese Public Offering and the International Offering” above is exercised in full by the international managers.
  3. The numbers of shares are based on the assumption that the maximum number of the offered shares set forth in “4. Issuance of new shares by way of third-party allotment” (1) above are subscribed for by the designated Japanese underwriter and are issued.

3. Use of proceeds

(1) Use of proceeds to be raised through the offerings

In February 2021, Renesas reached an agreement with Dialog to acquire the entire issued and to be issued share capital of Dialog and thereby make Dialog a wholly owned subsidiary of Renesas (the Acquisition). The Acquisition consideration of the entire issued and to be issued share capital of Dialog totals approximately EUR 4,886 million (approximately 615.7 billion yen based on the exchange rate as of February 3, 2021 of 126 yen per Euro). Renesas executed a Facilities Agreement with MUFG Bank, Ltd. and Mizuho Bank, Ltd., (borrowing limit: 735.4 billion yen) to procure necessary funds for the Acquisition. The fundraising through the issuance of new shares is intended to convert a part of funds to be obtained through such Facilities Agreement to long-term funds. Accordingly, Renesas intends to use the aggregate maximum amount of proceeds of 218,511,846,995 yen to be obtained from the Japanese Public Offering, the International Offering and the Third-Party Allotment to fund a part of the purchase price for the Acquisition. In this case, Renesas will not borrow the equivalent amount through the Facilities Agreement. The Acquisition is expected to close by the end of calendar year 2021.

However, if any of the Japanese Public Offering, the International Offering and the Third-Party Allotment are consummated after the payment date of the purchase price for the Acquisition, the proceeds from such delayed financing will be used to repay a part of borrowings under the Facilities Agreement that Renesas procures for payment of the purchase price for the Acquisition.

Although, the Acquisition is expected to close by the end of calendar year 2021 as noted above, the closing of the Acquisition is subject to, among other things, the sanction by the UK court and regulatory approvals from the relevant countries; therefore, the Acquisition may not be consummated if any or all of these conditions are not met.

In the event that the Acquisition is not consummated, the proceeds will be used in whole or in part for repayments of existing borrowings, investments in the businesses, capital expenditure or working capital.

In either case, the proceeds will be managed in a bank account until actual expenditure.

(2) Change in use of proceeds raised previously

Not applicable.

(3) Expected impact on operating performance

Renesas believes that the Acquisition of Dialog through this funding will enable Renesas to maintain a strong financial base, allowing Renesas to execute its future growth strategy, and that acquiring Dialog’s technology assets in analog semiconductors will contribute to revenue growth in the mid- to long-term.

4. Lock-up

In connection with the Global Offering, INCJ, Ltd., which is the seller in the 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 Global Offering, without the prior written consent of the joint global coordinators (which consent shall not be unreasonably withheld or delayed).

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 Japanese Public Offering, the International Offering, the Third-Party Allotment, the issuance of new shares in relation to a stock split, the issuance of new shares upon the exercise of certain stock acquisition rights, and the grant of restricted stock units and performance share units under the stock compensation plan where shares are delivered after vesting and the issuance of new shares in relation to such units, 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 Global Offering, 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.

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.

(Remarks) All names of products or services mentioned in this press release are trademarks or registered trademarks of their respective owners.

Note:
This press release has been prepared for the purpose of announcing to the public certain matters relating to the issuance of new shares and the secondary offering of shares of Renesas, and not for the purpose of soliciting investment or engaging in any other similar activities within or outside Japan. Investors should review the shelf registration prospectus, shelf registration supplemental prospectus (if prepared) and the prospectus for the secondary offering of shares, as well as amendments thereto (if any), 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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