Renesas Electronics Corp has agreed to buy Dialog Semiconductor for 4.9 billion euros ($5.9 billion) in cash, boosting its position in low-power technology and connectivity across smart devices, cars and industry. One of the world’s biggest auto chipmakers, Renesas aims to capitalise on technology shifts that are putting more electric vehicles on the streets with assisted driving technology while the rollout of 5G networks is connecting billions of devices to the so-called Internet of Things. Renesas offered 67.50 euros a share for Apple Inc supplier Dialog, representing a 20% premium to Friday’s closing price and a 52% mark-up to a weighted three-month average.

Renesas has filed to issue up to 270 billion yen ($2.6 billion) in new shares to fund its latest deal, which Shibata said would boost earnings immediately on closing. He forecast an immediate gross margin uplift of 0.6 percentage points and a rise of 0.4 percentage points in core earnings. Dialog specialises in power-management chips and low-energy Bluetooth products used in fitness trackers and cordless earphones.

It agreed in 2018 to transfer people and patents involved in designing the main power-management chip used in iPhones to Apple in a $600 million deal that left it a smaller and more broad-based business.

Writing by Douglas Busvine

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