As part of its review of its cross-shareholdings, Denso announced that it will sell a majority of its shares in Renesas Electronics to fund growth investments.
🟦 Denso to sell majority of Renesas shares—Collaboration continues, capital strategy restructuring
Denso announced that it will sell 73.9 million shares (approximately 4.1% of the outstanding shares) of its Renesas Electronics shares. As a result, the shareholding ratio is expected to decline from 4.2% to 0.1%. The gain on the sale amounted to 105.8 billion yen, which will be recorded as extraordinary income in the non-consolidated financial results for the fiscal year ending March 2026.
Denso will continue to hold a 0.1% stake in the company, and has stated that it will maintain and strengthen its collaborative relationship with Renesas. Since the investment in 2013, the two companies have been jointly developing and stably procuring automotive semiconductors, and the relationship is expected to continue in the technical field in the future.
🟦 Why sell now? Capital efficiency and changes in industrial structure
The sale is part of DENSO’s renewed financial strategy for 2022. Based on the four pillars of “reduction of low-income assets” and “improvement of capital structure,” the review of cross-shareholdings is underway. There has been a similar movement within the Toyota Group, with the sale of all Toyota Industries shares in 2024.
In the background, the automotive industry as a whole is undergoing a period of great change, which requires intensive investment in new areas such as electrification and software-defined vehicles (SDV). The proceeds from the sale are expected to be used to fund these growth investments.
🟦 Summary
Denso has indicated its intention to focus its funds on growth investments by selling the majority of its shares in Renesas Electronics. While maintaining a collaborative relationship, it is clear that the company is flexibly restructuring its capital strategy.
It would be nice if the break in the money did not become a break in the relationship, but it is likely that the attitude of continuing to collaborate while sorting out the capital relationship will be judged by the results of future collaboration.
