NEC Electronics Corporation, Renesas Technology Corp., NEC Corporation, Hitachi, Ltd. and Mitsubishi Electric Corporation today agreed to enter into negotiations to integrate business operations at NEC Electronics and Renesas.
NEC Electronics was established in 2002, separating from NEC, and Renesas was established in 2003, integrating semiconductor units at Hitachi and Mitsubishi Electric. Both as leading semiconductor companies, NEC Electronics and Renesas provide a wide variety of semiconductor solutions, primarily specializing in microcontroller units (MCUs). In light of fierce global competition in the semiconductor market, NEC Electronics and Renesas have agreed to explore the possibility of business integration in order to further strengthen their business foundations and technological assets.
By integrating the world's two largest MCU suppliers, the new company could become one of the most competitive MCU product lineups throughout the world.
NEC Electronics and Renesas both focus on the fast-growing field of system-on-chip (SoCs) products. NEC Electronics is a leading producer of SoCs for digital consumer electronics, while Renesas is a well established manufacturer of SoCs for mobile phones and automotive applications.
The new integrated company will have three major product groups, MCUs, SoCs, and discrete products, and will become the world's third-largest semiconductor business.
In order to address the ongoing challenges of the current economic downturn, NEC Electronics and Renesas are planning to execute structural reform plans in order to strengthen their business frameworks. Upon completion of these structural reforms, the two companies will integrate their operations to achieve synergies and boost profitability.
The preconditions for holding future negotiations are to integrate business operations on April 1, 2010, and to maintain public listing for the new company.
To ensure fairness and equitability, the ownership ratio of the integrated company will be decided and announced before the conclusion of the integration contract through negotiations between NEC Electronics and Renesas, based on scheduled due diligence. The new company will announce the company name, the location of its headquarters, the corporate representative, the board members, capitalization, total assets, and financial forecasts following the integration.
NEC Electronics and Renesas plan to sign an agreement at the end of July, 2009 to integrate their business operations. The dates and details of the extraordinary general meetings of shareholders for NEC Electronics and Renesas to consider approval of the integration are to be announced following the signing of the agreement.
Implementation of the planned business integration is conditional upon authorization of the integration by the relevant government agencies.