Renesas abandons acquisition of French analog semiconductor fabless company
🟦 Renesas abandons acquisition of French semiconductor sequencing
Renesas Electronics Corporation announced that it will abandon its acquisition of French semiconductor company Sequans Communications. Initially, the company planned to acquire more than 90% of the issued shares of Sequans through a tender offer (TOB) and acquire it for about 200 million dollars (about 28 billion yen).
Sequans is a fabless company that specializes in analog semiconductors that are power-saving and suitable for wide-area communications. Sequans specialize in design and development, and outsource manufacturing. Renesas had a stake in Sequans in 2022.
🟦 Caused by an unexpected tax burden
Renesas received a notice from the Tokyo Regional Taxation Bureau that the acquisition was subject to income tax, resulting in an unexpected tax burden. This tax burden could have a significant impact on Renesas’ management plan, so Renesas decided not to acquire it.
Renesas had been aiming to strengthen its IoT business through the acquisition of Sequans, but the abandonment of this acquisition forced it to change its strategy. In the future, it will be necessary to continue the cellular IoT business through traditional partnerships while considering new business strategies.
🟦Summary
Renesas abandons the acquisition of a French analog semiconductor fabless company. Unexpected tax burdens can have a significant impact on Renesas’ management plans.
The unexpected incurring of tax burdens reminds us of the risks associated with corporate acquisitions.
