Raising 210 billion yen to accelerate EV investment
🟦 Denso sells more than half of Renesas shares
Denso sold 78,127,800 shares worth approximately 210 billion yen of Renesas Electronics shares, or more than half of Denso’s holdings. This is to review cross-shareholdings and to raise funds for growth investments such as the electrification of automobiles. The gain on the sale amounted to approximately 177.8 billion yen, which will be recorded as extraordinary income in the non-consolidated financial results for the fiscal year ending March 2025.
🟦 Achievements in semiconductor procurement and joint development
Denso invested in Renesas Electronics in 2013 and increased its stake in Renesas Electronics in 2018. As a result of the procurement and joint development of semiconductors, we have obtained a certain level of collaborative results, so we have decided to sell some of them this time. DENSO intends to maintain and strengthen its business collaboration with Renesas Electronics in the future. The reasons for this sale are as follows.
- Review of cross-shareholdings
- Based on the financial strategy that DENSO renewed in the fiscal year ended March 2022, it is proceeding with the sale of cross-shareholdings, which are low-profit assets.
- Financing Growth Investments
- With the electrification of the automotive industry and the shift to CASE, the demand for semiconductors is increasing. DENSO intends to utilize these funds to actively promote growth investments.
- Elimination of cross-shareholdings within the Group
- In March 2024, DENSO will sell all of its shares in Toyota Industries and the Toyota Motor Group, and is working to dissolve its cross-shareholdings within the group.
🟦Summary
Denso has sold part of its shares in Renesas Electronics. The purpose of the sale is to raise investment funds for the electrification of vehicles and to improve capital efficiency. Denso will continue to hold a 4.3% stake in Renesas and will maintain a business collaboration.
We can only hope that the sale of Renesas Electronics shares will not have a negative impact on the relationship between Denso and Renesas Electronics.
