NEC Electronics and Renesas will receive 2.2 billion merger of injection
Technology company recently said Wednesday they will merge the two companies because their parent was from 200 billion yen, that is, 2.2 billion of capital, creating the world's third largest semiconductor
Sell
Company.
Earlier this year, NEC Group, NEC Electronics and Renesas, Hitachi, Mitsubishi Electric agreed to in April 1, 2010 the company established a new entity.
NEC Electronics 70% of the shares belong to NEC Group, and Hitachi has a 55% stake in Renesas Technology, Mitsubishi Electric will have the remaining 45% Renesas. The capital injection will improve the combined company funds for product development expenses.
The deal is intended to help the two companies through the computer-chip prices fell due to a downturn. The two companies expect to cut development of new business and manufacturing costs.
If based on fiscal 2008 earnings report, NEC Electronics and Renesas merger, will be the sum of 1.25 trillion yen in revenue after the U.S. Intel (blog) Company and South Korea
Samsung
Electronics, the world's third largest semiconductor sales company.
Market downturn to increase the pressure on the chip manufacturers, but also to strengthen the chip industry's survival of the fittest.
Earlier this month, Abu Dhabi, ATIC has agreed to 1.8 billion cash acquisition of the Singapore chip maker Chartered Semiconductor.
Although the current scale is still smaller than major competitors, but after the merger NEC Electronics and Renesas microprocessors that control the high-tech
Car
The leading high-technology products.
These devices are expected for the chip maker is a big business, because the equipment is growing in popularity, a new generation of high-tech
Environmental protection
An essential vehicle parts.
It is reported that on April 1 Renesas Hitachi and Mitsubishi Electric to its parent company issued new shares worth 78 billion yen. In addition, the combined entity will further sale of 122 billion yen worth of new shares, to the NEC Group, Hitachi and Mitsubishi Electric financing.
On the 200 billion yen capital injection, the new NEC Electronics funding is almost double the current market value. In the Tokyo stock market closed before the third week, that is, before the capital injection, NEC Electronics already has 110 billion yen in market value.
However, with the global economic recovery, chip market conditions have begun to ease, the pressure of shrinking demand for semiconductor products NEC Electronics and Renesas affect profitability.
This fiscal year, ending March 31, Renesas Technology achieved a net loss of 202.8 billion yen, while NEC Electronics is also in the same period a net loss of 82.6 billion yen.
According to reports, if all goes well, then the final details of the merger will be announced in mid-January next year, when the parties will sign an agreement.
But the new injection of funds there may be pressures on the balance sheet.
Week three, Hitachi in its separate statement, said Hitachi does not pay dividends early in September. In the first half of last year, Hitachi announced the largest ever loss of Japanese manufacturing companies, distribution of a dividend of ¥ 3 per share.
Earlier this year, people familiar with the situation said, NEC is considering raising capital, to strengthen its capital base.
Although the NEC has not yet decided the amount or timing of any details, but recent media reports that the amount of financing is likely to around 150 billion yen.
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