Brit chip designer Dialog Semi confirms 'advanced discussions' regarding purchase by Japan’s Renesas

Warns €67.50-per-share offer would represent a very tidy premium, but may not happen


Updated British chip design company Dialog Semiconductor has confirmed it is in “advanced discussions” with Japan’s Renesas Electronics Corporation regarding a possible acquisition.

Both companies published Sunday announcements about the deal.

Renesas’ document mentioned recent media speculation about “potential acquisition of a UK-based semiconductor” and said that speculation is “largely accurate.”

Dialog named Renesas in its statement [PDF], adding that the discussions have suggested €67.50-per-share could change hands.

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Dialog’s shares trade on Germany’s XETRA and closed trading last Friday at US$68.26 (£49.70, €56.70). If Renesas makes an offer at €67.50 it would represent a hard-to-resist 16 per cent premium.

When acquisition targets don’t want to be bought, their statements usually say as much, and quite forcefully. This one offers a sound disclaimer to the effect that Dialog will say more when it can but can’t be sure anything will happen, before trailing off into legalese about what Renesas has to say in public about the offer, and when the Japanese company must say it.

Dialog is a fabless chip designer that produces components including Wi-Fi and Bluetooth controller silicon, and counts Apple and Samsung among its customers. Dialog has recently tried to position itself as a supplier to automotive and internet-of-things companies. In 2018, Apple acquired part of the company to get its hands on power management technology for the iPhone.

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Renesas operates in similar fields, but has half a dozen fabs in Japan, where it makes ARM-based SoCs in addition to numerous less glamorous components.

At $6.9bn annual revenue and almost 20,000 staff, the Japanese company is rather larger than Dialog’s $1.55bn and 1,850 souls.

Dialog was founded in the USA but uses the UK as its HQ. Edinburgh hosts an R&D facility, and the biz has major facilities in Germany and other locations. If the company is sold, it may be less politically perilous than Softbank’s 2016 acquisition of Brit chip darling Arm. ®

Updated to add

It's now official and agreed: Dialog will be acquired [PDF] for €4.886bn ($5.9bn) in shares by Renesas. The deal is subject to the usual shareholder and regulatory approval.


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