Renesas aims to provide device design through Altium’s digital tools for engineers and designers working on circuit boards.
Japan’s Renesas Electronics plans to acquire electronics design firm Altium for $5.9 billion in cash. The acquisition positions Renesas as a leader in deal making and investment within Japan’s chip industry, aligning with the government’s efforts to enhance competitiveness and bolster supply chain resilience against geopolitical shocks.
Renesas, a supplier of chips to major automakers like Toyota and Nissan, aims to provide device design through Altium’s digital tools for engineers and designers working on circuit boards. Renesas CEO Hidetoshi Shibata emphasised the need for the company to evolve beyond being a traditional device manufacturer to avoid marginalisation.
The offer price of $44.49 per Altium share represents a 34% premium over the stock’s closing price on the day before the announcement. Renesas plans to finance the acquisition using cash on hand and bank loans. Altium, headquartered in the United States and listed in Australia, reported sales of $263 million for the year ended June, with an EBITDA margin of 36.5%.
Altium CEO Aram Mirkazemi expressed optimism that the deal would accelerate the company’s execution. The transaction has received approval from both companies’ boards but still requires approval from Altium shareholders, an Australian court, and regulators. Renesas anticipates closing the deal in the second half of the year.
Following the announcement, Renesas’ share price initially fell by up to 4.9% but later recovered, while Altium shares surged by 28%. Market analysts have mixed reactions, with some viewing the acquisition as a fair deal, while others remain uncertain about its long-term growth contribution.
Altium had previously rejected a $3.9 billion takeover bid from Autodesk in 2021, deeming it too low. The current unanimous board support and significant premium suggest that the transaction is likely to proceed.
This deal is part of a broader trend of Japanese companies seeking growth opportunities overseas to offset domestic challenges, such as deteriorating demographics. Renesas itself has a history of mergers and acquisitions, including a $3.2 billion deal for Intersil in 2016 and a $6.7 billion purchase of Integrated Device Technology in 2018. Most recently, Renesas announced plans to acquire U.S. power semiconductor company Transphorm Technology for $339 million, further expanding its presence in the market for gallium nitride chips used in electric vehicles.
