Dialog agrees to US$6b takeover by Renesas Electronics

[LONDON] Renesas Electronics Corp of Japan has agreed to acquire Apple supplier Dialog Semiconductor, the latest UK-based chipmaker being sold to Asian investors.

Dialog accepted the all-cash offer of about US$5.9 billion, at 67.50 euros (S$108.45) per share, the companies said in statements Monday. Dialog shares rose as much as 18 per cent in early trading in London on Monday. Renesas shares dropped as much as 6.9 per cent in Tokyo.

The offer price is a 20 per cent premium to Dialog's Friday close of 56.12 euros. Shares of the company - headquartered near London but listed in Frankfurt - have risen around 25 per cent since the start of the year, boosted by strong demand for Apple's 5G handsets as well as takeover speculation.

The company had been working with advisers and was holding discussions with STMicroelectronics before the Franco-Italian company was outbid, Bloomberg News reported on Sunday.

"We had multiple interested parties in the acquisition of Dialog," Jalal Bagherli, chief executive officer of Dialog, said in a call with investors on Monday. Renesas was chosen for its culture, reputation, technology and market reach, he said.

Stephane Houri, analyst at Oddo, said he doesn't expect to see a counter offer though the bid may need to be sweetened. The 20 per cent premium, while acceptable given historic levels, may not represent the full value.

The volume of deals involving semiconductor companies more than doubled last year to US$144 billion, according to data compiled by Bloomberg. Nvidia agreed in September to buy SoftBank Group's chip division Arm for US$40 billion, taking control of some of the most widely used chip technology in the industry's largest-ever deal.

Arm, once the UK's largest listed tech company, was sold to SoftBank in 2016, while chip designer Imagination Technologies Group was sold to Chinese-backed investor Canyon Bridge Capital Partners in late 2017.

BLOOMBERG