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Sunday, Sep. 23, 2012

INCJ aims to jointly buy 50% of Renesas

Jiji

The state-backed Innovation Network Corp. of Japan is thinking of jointly acquiring troubled chip-maker Renesas Electronics Corp. with major private-sector companies including Toyota Motor Corp. and Panasonic Corp., sources said Saturday.

The public-private support initiative is aimed at helping Renesas to ensure a stable supply of microcontrollers for automobiles and home appliances.

The parties involved are also hoping to counter a bid by U.S. investment fund Kohlberg Kravis Roberts & Co., which in late August proposed injecting ¥100 billion into Renesas to acquire a 50 percent stake, the sources said.

INCJ has approached other major clients of Renesas over investing in the chip-maker, such as Nissan Motor Co., Honda Motor Co., Canon Inc. and leading auto parts makers. It hopes to drum up more than ¥100 billion to invest in Renesas and obtain a majority stake.

INCJ intends to draw up an investment plan in October and propose it to Renesas' three major shareholders — NEC Corp., Hitachi Ltd. and Mitsubishi Electric Corp. — and its main creditor banks, according to the sources.

Domestic auto and electronics makers have grown increasingly concerned that Renesas — the world's leading maker of microcontrollers for cars, consumer electronics and other products — would be urged to streamline operations if it is acquired by the U.S. fund, disrupting their procurement plans.

Renesas was established in April 2010 through the merger of two chip-makers — Renesas Technology Corp., a joint venture between Hitachi and Mitsubishi Electric, and NEC Electronics Corp, a subsidiary of NEC.

The company incurred a group net loss of ¥62.6 billion in fiscal 2011 that ended March 31 because many of its plants were damaged by the March 2011 disasters in the Tohoku region.

It has received a total of ¥100 billion from NEC, Hitachi, Mitsubishi Electric and major creditors, and is promoting restructuring measures, such as consolidating domestic plants and slashing some 10,000 jobs.



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