News
KAWASAKI, Japan, TOKYO, Japan, December 15, 2009 -- NEC Electronics Corporation (NEC Electronics; TSE: 6723) and Renesas Technology Corp. (Renesas) today announced they have entered into a merger agreement to integrate business operations at NEC Electronics and Renesas (the "Business Integration" or the “Merger”) on April 1, 2010 (scheduled). The agreement is subsequent to the definitive agreement, which was signed on September 16, 2009. The Business Integration will become effective following the adoption of the resolutions at Extraordinary General Meetings of Shareholders of both NEC Electronics and Renesas and approval by relevant authorities.
1. Goals of Business Integration
2. Outline of Business Integration
| Signing of basic agreement | April 27, 2009 |
| Signing of definitive agreement | September 16, 2009 |
| Meeting of the Boards of Directors for the approval of merger agreement | December 15, 2009 |
| Signing of merger agreement | December 15, 2009 |
| Public Notice of record date for Extraordinary�Shareholders’ meeting (NEC Electronics) | December 16, 2009 |
| Record date for Extraordinary Shareholders’ meeting (NEC Electronics) | December 31, 2009 (Note) |
| Shareholders meetings for approval of merger agreement (both NEC Electronics and Renesas) | February 24, 2010 (planned) |
| Effective date of Merger | April 1, 2010 (planned) |
(2) Structure of Business Integration
The Merger will be effective with NEC Electronics being the surviving entity.
(3) Share allocation in accordance with the Business Integration
| NEC Electronics (surviving entity) |
Renesas | |
| Merger Ratio (Note 1) | 1 | 20.5 |
NEC Electronics will issue 20.5 shares of its common stock in exchange for every Renesas common share held by shareholders recorded in Renesas’ registers of shareholders at the end of the day prior to the effective date of the merger.
Note 2: Number of NEC Electronics’ new shares to be issued upon Merger (scheduled)
Common shares: 146,841,500 shares
Note 3: In accordance with Art. 124 §4 of the Corporation Law, Hitachi, Ltd. (Hitachi) and Mitsubishi Electric Corporation (Mitsubishi Electric), the new shareholders of the Integrated Company after the Business Integration, will be entitled to vote at the ordinary shareholders meeting of the Integrated Company which is scheduled to be held in June 2010.
(4) Outline of reinforcement of capital
As a condition to the Business Integration, Renesas will issue shares of its common stock to Hitachi and Mitsubishi Electric, the sole shareholders of Renesas, in exchange for an aggregate of approximately 71.7 billion yen (including shares issued on September 29, 2009 in exchange for an aggregate of 55.0 billion yen) before the effective date of the Business Integration (the “Pre-merger Capital Injection”). In addition, on the effective date of the Business Integration (scheduled to be April 1, 2010), the Integrated Company will issue shares of its common stock to NEC Corporation (NEC), Hitachi and Mitsubishi Electric in exchange for an aggregate of approximately 134.6 billion yen (the “Post-merger Capital Injection”).
(5) Notes on share acquisition rights and bonds with share acquisition rights of Renesas
: None
3. Basis and Process of Calculation of Merger Ratio
Note: The Integration Ratio represents the ratio between the total number of the NEC Electronics common shares outstanding (not including the potential shares) immediately before the Business Integration and the total number of the NEC Electronics common shares to be allocated to the Renesas shareholders as a result of the Business Integration, based on the assumption that the Pre-merger Capital Injection is funded before the Business Integration.
4. Outline of NEC Electronics and Renesas
| (1) | Company Name | NEC Electronics Corporation (Surviving entity) |
Renesas Technology Corp. | ||||||
| (2) | Headquarters | Kawasaki City, Kanagawa Prefecture, Japan |
Chiyoda-ku, Tokyo, Japan | ||||||
| (3) | Representative |
Junshi Yamaguchi, President and CEO |
Katsuhiro Tsukamoto, Representative Director,
Chairman Yasushi Akao, Representative Director, President |
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| (4) | Major Operations | R&D, manufacture, sale, and servicing of semiconductor devices mainly on system LSIs | Development, design, manufacture, sale, and servicing of SoC products such as MCUs, logic devices, and analog devices; discrete semiconductor products; and memory products such as SRAM | ||||||
| (5) | Capital | ¥85.955 billion (As of September 30, 2009) |
¥104.500 billion (As of September 30, 2009) |
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| (6) | Established | November 1, 2002 | April 1, 2003 | ||||||
| (7) | Number of Stocks Issued | 123.5 million (As of September 30, 2009) |
6.09 million (As of September 30, 2009) |
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| (8) | End of FY | March 31 | March 31 | ||||||
| (9) | Employees | 22,207 (Consolidated, As of September 30, 2009) | 25,000 (Consolidated, As of September 30, 2009) | ||||||
| (10) | Major Customers | Electronic equipment manufacturers, Semiconductor production equipment manufacturers, Semiconductor materials manufacturers | Electronic equipment manufacturers, Semiconductor production equipment manufacturers, Semiconductor materials manufacturers | ||||||
| (11) | Main Banks | Sumitomo Mitsui Banking Corporation | The Bank of Tokyo-Mitsubishi UFJ, Ltd., Mizuho Corporate Bank, Ltd. | ||||||
(12) |
Major Stockholders and Ownership Ratios | NEC Corporation: 65.02% Japan Trustee Services Bank, Ltd. (Re-trust of The Sumitomo Trust and Banking Co., Ltd. / NEC Corporation pension and severance payments Trust Account): 5.02% (Note 1) | Hitachi, Ltd.: 55% Mitsubishi Electric Corporation: 45% | ||||||
| (13) | Present Relationship between Corporate Parties | ||||||||
| Capital Ties | Renesas owns 100 shares of stock in NEC Electronics. | ||||||||
| Personal Ties | No relevant items | ||||||||
| Business Relationship | NEC Electronics outsources some production processes to Renesas Northern Japan Semiconductor, Inc., a consolidated subsidiary of Renesas. | ||||||||
| Relevant Circumstances of Related Parties | No relevant items | ||||||||
| (14) | Business Performance for the last three years (Unit: ¥1 million except for otherwise expressly stated herein) |
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| NEC Electronics (Consolidated, US-GAAP) (Note 2) |
Renesas (Consolidated, Japan-GAAP) |
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| Fiscal Year Ending | March 31, 2007 | March 31, 2008 | March 31, 2009 | March 31, 2007 | March 31, 2008 | March 31, 2009 | |||
| Net Sales | 692,280 | 687,745 | 546,470 | 952,590 | 950,519 | 702,739 | |||
| Semiconductor Sales | 659,733 | 653,275 | 521,735 | - | - | - | |||
|
Operating Income (Loss) | -28,557 | 5,094 | -68,355 | 23,644 | 43,480 | -96,573 | ||
| Ordinary Income (Loss) | 15,931 | 29,215 | -102,799 | ||||||
| Income (Loss) before Income Taxes | -35,375 | -3,252 | -89,335 | 13,275 | 28,171 | -136,656 | |||
| Net Income (Loss) | -41,500 | -15,995 | -82,625 | 8,738 | 9,468 | -203,257 | |||
| Net Income (Loss) Per Share (¥) | -336.04 | -129.52 | -669.04 | 1,747.52 | 1,893.64 | -40,627.31 | |||
| Dividend Per Share (¥) | 0 | 0 | 0 | 0 | 0 | 0 | |||
| Net Assets Per Share (¥) | 2,146.32 | 1,839.20 | 1,037.51 | 65,735.31 | 66,623.71 | 31,497.69 | |||
Note 2: NEC Electronics’ consolidated financial information until FY 09/3 is in accordance with U.S. GAAP. However, the figure for operating income shown above represents net sales minus the cost of sales, research and development expenses, and selling, general and administrative expenses. The figure for net assets per share shown above represents shareholders’ equity per share.
Note 3: After the Pre-merger Capital Injection of approximately 71.7 billion yen, the amount of Renesas’ capital is expected to amount to 112,850 million yen and the total number of shares issued is expected to be 7,163,000 shares.
5. Outline of the Integrated Company
| (1) | Company Name | Renesas Electronics Corporation |
| (2) | Headquarters | Kawasaki City, Kanagawa Prefecture, Japan |
| (3) | Candidates of Administrative Organization (Note 1) |
Junshi Yamaguchi, Representative Director, Chairman (currently President & CEO of NEC Electronics) Yasushi Akao, Representative Director, President (currently Representative Director, President of Renesas) Members of the Board Kazuaki Ogura (currently General Manager, Merger Preparation Office of Renesas) Masaki Kato (currently Executive Vice President and Member of the Board of NEC Electronics) Yoichi Yano (currently Executive Vice President and Member of the Board of NEC Electronics) Shozo Iwakuma (currently Board Director and General Manager of Human Resources & General Affairs Division of Renesas)
Outside Directors Toyoaki Nakamura (currently Representative Executive Officer, Senior Vice President and Executive Officer of Hitachi) Nobuhiro Endo (currently Senior Vice President and Member of the Board of NEC) Noritomo Hashimoto (currently Executive Officer, Director of Mitsubishi Electric, Outside Director of Renesas) Hajime Matsukura (currently General Manager, Corporate Strategy and Business Development of NEC, Outside Director of NEC Electronics) To Be determined (Plan to appoint an expert director from the high-tech field)
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| (4) | Major Operations | Research, development, design, manufacture, sale, and servicing of semiconductor products |
| (5) | Capital | ¥ 153,255,000,915 (including the Post-merger Capital Injection) |
| (6) | End of FY | March 31 |
| (7) | Net Assets | To be determined |
| (8) | Total Assets | To be determined |
6. Financial Outlook after the Merger
To be informed upon determination.
About NEC Electronics
NEC Electronics Corporation (TSE: 6723) specializes in semiconductor products encompassing advanced technology solutions for the high-end computing and broadband networking markets, system solutions for the mobile handset, PC peripheral, automotive and digital consumer markets, and multi-market solutions for a wide range of customer applications. NEC Electronics Corporation has subsidiaries worldwide including NEC Electronics America, Inc. and NEC Electronics (Europe) GmbH. For additional information about NEC Electronics worldwide, visit www.necel.com.
About Renesas Technology Corp.
Renesas Technology Corp. is the world's No.1 supplier of microcontrollers and one of the world's leading semiconductor system solutions providers for mobile, automotive and PC/AV (Audio Visual) markets. It is also a leading provider of Power MOSFETs, Smart Card microcontrollers, RF-ICs, High Power Amplifiers, Mixed Signal ICs, System-on-Chip (SoC), System-in-Package (SiP) and more. Established in 2003 as a joint venture between Hitachi, Ltd. (TSE:6501, NYSE:HIT) and Mitsubishi Electric Corporation (TSE:6503), Renesas Technology achieved consolidated revenue of 702.7 billion JPY in FY2008 (end of March 2009). Renesas Technology is based in Tokyo, Japan and has a global network of manufacturing, design and sales operations in 16 countries with 25,000 employees worldwide. For further information, please visit http://www.renesas.com
Exhibit 1: Brief biography of Representative Directors of the Integrated Company
Junshi Yamaguchi
BIRTHDAY
27, November 1950
EDUCATION
1974.3 Bachelor of Science, engineering, Keio University, Japan
Yasushi Akao
BIRTHDAY
7, August 1954
EDUCATION
1979.3 Master of Electronics and Electrical Engineering, Keio University, Japan
1977.3 Bachelor of Technology, Keio University, Japan
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