Renesas Electronics strikes $5.9 bn all-cash deal to acquire Altium: Report

Japanese chipmaker Renesas Electronics has announced a landmark agreement to acquire Australian-listed electronics design firm Altium for A$9.1 billion ($5.91 billion) in an all-cash deal.

Renesas will pay A$68.50 per share, representing a substantial 34 per cent premium to Altium's closing price on Wednesday.

The move aims to revolutionise the electronics design process, catering to the increasing pressure to shorten time-to-market, according to Renesas CEO Hidetoshi Shibata.

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The acquisition underscores Renesas' commitment to bolster its position in the semiconductor industry.

Altium, headquartered in California and listed in Australia, specialises in providing tools for designing circuit boards.

Renesas intends to leverage Altium's expertise to enhance its capabilities and streamline the electronics design workflow for its customers.

The deal, approved by both companies' boards of directors, is now subject to approval from Altium shareholders, an Australian court, and regulatory authorities.

Renesas' decision to pay a 34 per cent premium for Altium's shares prompted varied reactions in the market.

Reuters quoted Tatsunori Kawai, the Chief Strategist at au Kabucom Securities, who commented, "They don't seem to be overpaying, but the fact (market) players are not reacting positively also means they are still unconvinced about how this deal would contribute to the company's long-term growth."

Renesas' share price initially fell by 4.9 per cent, later recovering to trade down 0.5 per cent at 2,589 yen.

Altium shares, on the other hand, surged by 28 per cent to A$65.80, reflecting a positive response to the acquisition.

Altium CEO Aram Mirkazemi expressed optimism about the deal, stating, "This is going to help us execute at a faster pace."

The acquisition marks a significant development for Altium, which in 2021 rejected a $3.9 billion takeover bid from software company Autodesk.

The rejection was based on the perception that the offer was too low.

In the absence of a superior offer and with the unanimous support of Altium's board, the deal with Renesas is expected to proceed after approval from shareholders and regulatory bodies.

Renesas' recent acquisitions, including the purchase of power semiconductor company Transphorm for $339 million, reflect the company's strategic focus on advancing technologies, particularly gallium nitride chips used in electric vehicles.

The Japanese chipmaker, formed in 2010 through a merger of NEC's chip division and Renesas Technology, continues to expand its portfolio through strategic acquisitions, positioning itself as a key player in the semiconductor market.

(With inputs from Reuters)