Shares of Dialog Semiconductor 0OLN,
shot up 21% on Monday after Japan’s Renesas Electronics bought the UK-listed Apple supplier for € 4.9 billion ($ 5.9 billion).
The € 67.50 cash offer per share represents a 20% premium over the closing price of Dialog’s share on Friday, and a 52% premium for a three-month weighted average, the company said in a statement. communicated.
DLGNF Dialog,
whose customers include Apple AAPL,
Samsung Electronics 005930,
Panasonic 6752,
and Xiaomi 1810,
said the deal was an “attractive opportunity” for its shareholders and that its board would unanimously recommend the offer.
Actions in Dialog DLG,
rose to 21% at the start of the European trading session on Monday, before falling back to 16.57% trading above.
“We believe Renesas’ strong footprint in microcontrollers and system chips would be complementary to better leverage Dialog’s products,” said UBS analysts in a note to customers on Monday.
Renesas 6723,
one of the world’s largest suppliers of automotive chips, saw its shares fall 3.61% in Tokyo on Monday, while investors digested the deal, which is the latest in the company’s four-year takeover wave. This included the acquisition of the American company Integrated Device Technology for $ 7.2 billion in 2018.
The acquisition of Dialog marks the second time that a UK chip maker has become the target of foreign bidders after Nvidia NVDA,
in September 2020 bought the 9984 from SoftBank Group,
arm chip division for $ 40 billion.
The deal comes amid a wave of consolidation in the semiconductor industry in recent months. In October, AMD AMD,
bought rival Xilinx XLNX,
in a $ 35 billion all-share transaction, while in January Intel sold its NAND memory unit to SK Hynix for $ 9 billion.
The acquisition of Dialog may attract the attention of UK regulators, who last year announced the biggest change in the country’s procurement rules in two decades in an attempt to protect strategic assets from hostile bidders.
Read: Proposals to buy UK companies become more difficult as ministers have prevented acquisitions from countries like China, Russia and the United States
The UK competition regulator said in January that it would start an investigation into Nvidia’s acquisition of Arm, including analyzing whether, after the acquisition, Arm will have an “incentive to withdraw, raise prices or reduce quality of your IP [intellectual property] licensing services for Nvidia’s rivals. “
Read: The $ 40 billion acquisition of Arm by Nvidia to be investigated by the UK competition regulator
“While the deal is unlikely to face scrutiny by UK regulators, the fact that the CMA [Competition and Markets Authority] is looking at the recent agreement between Nvidia to acquire Arm Holdings from SoftBank, there is a risk that we may see them taking a look at this, ”said Michael Hewson, chief market analyst at CMC Markets UK, in a note to customers on Monday.
UBS analysts said that, due to Dialog’s small size and the fragmentation of the automotive / industrial market, they believe the antitrust risk is likely to be “relatively low”.