Renesas Electronics, the second-biggest supplier of semiconductors used in cars, plans to acquire Integrated Device Technology Inc. for about $6.7 billion to expand beyond the automotive sector.

The two companies have signed a definitive agreement under which Renesas will acquire IDT for US$49.00 per share in an all-cash transaction representing an equity value of approximately US$6.7 billion (approximately 733.0 billion yen at an exchange rate of 110 yen to the dollar). The boards of directors of both companies have unanimously approved the transaction. Closing of the transaction is expected to occur in the first half of 2019, following approvals by IDT shareholders and the relevant regulatory authorities.

Renesas is working to expand its analog solution lineup and to strengthen its kit solution offerings that combine its microcontrollers (MCUs), system-on-chips (SoCs) and analog products. These efforts will be underpinned by revenue growth in its focus domains: automotive segment, which is expected to see tremendous growth with autonomous driving and EV/HEV; industrial and infrastructure segments, which are expected to advance with Industry 4.0 and 5G (fifth-generation) wireless communications, as well as the fast-growing IoT segment. The completion of the Intersil Corporation acquisition in February 2017 enabled Renesas to add power management and precision analog capabilities to its product portfolio.

Acquisition of IDT's analog mixed-signal products for data sensing, storage and interconnect enables Renesas to extend its reach to data economy-related applications including data center and communication infrastructure, and to strengthen its presence in the industrial and automotive segments.

"This acquisition will bring us complementary, market-leading analog mixed-signal assets and an incredibly talented group of professionals to help us boost our embedded solution capabilities," said Bunsei Kure, Representative Director, President and CEO of Renesas. "IDT's products combined with our MCUs, SoCs and power management ICs will enable Renesas to widen its product offerings as well as to expand its reach into areas such as the growing data economy-related space."

Renesas is second only to NXP Semiconductors NV in automotive market share. Last year, the Japanese company paid $3.2 billion for Intersil Corp., a U.S. chipmaker whose product lineup includes semiconductors that manage battery voltage in hybrid and electric vehicles.