Renesas and NEC Electronics (TYO:6723) to Get Financial Aid for Merger
Tokyo, Aug 26, 2009 AEST (ABN Newswire) - Renesas Technology Corp. and NEC Electronics Corp. (TYO:6723) could receive a total of 200 billion yen in financial assistance from their parent companies to proceed the proposed merger, said Japanese media.
Renesas, Japan's second-largest chipmaker, and NEC Electronics agreed earlier this year to merge by next April. Due diligence has shown that Renesas' large liabilities will need to be addressed.
Executives of Hitachi Ltd. (TYO:6501), Mitsubishi Electric Corp. (TYO:6503) and NEC Corp. (TYO:6701) agreed Tuesday on the need for financial assistance. Hitachi Ltd. and Mitsubishi Electric Corp. are the joint owners of Renesas Technology, while NEC holds 65% interest in NEC Electronics.
Renesas and the listed NEC Electronics aim to finalize the merger ratio, likely to be roughly 1 to 1. The merged entity will maintain the stock listing. NEC is expected to become the top shareholder of the merged firm.
NEC Electronics and Renesas said that their merger agreement would be delayed by one month until the end of September.
Asia Business News Asia Bureau
Mitsubishi Electric Corporation