Renesas Electronics Corporation (Representative Director, Chairman and CEO, Hisao Sakuta, hereafter "Renesas") and its wholly-owned subsidiary Renesas Mobile Corporation (Chief Executive Officer: Hideaki Chaki, hereafter "RMC") today announced that it decided to transfer all the shares of Renesas Mobile Europe Oy, RMC's subsidiary (hereafter "RME"), and Renesas Mobile India Private Limited, RME's subsidiary (hereafter "RMI") to Broadcom Corporation (hereafter "Broadcom") (together with certain assets related to its LTE modem technology hereafter "Transfer"), and executed a definitive agreement (hereafter "Definitive Agreement") with Broadcom to effect such transfer, upon the terms and subject to the conditions of the agreement.
Reason for Transfer
Renesas and RMC announced on June 27 that they would stop development activities and sales expansion of the 4th generation wireless modem developed by RME and RMI (hereafter "LTE Modem"), and work towards the termination of this business. After the announcement, Renesas and RMC had started performing the steps necessary to end these activities. During the process, however, Broadcom proposed Renesas and RMC to acquire the LTE Modem technology. Reviewing this proposal, Renesas and RMC reached a conclusion that it would be desirable for all the stakeholders to effect the Transfer to Broadcom, a prominent technology innovator and global leader in semiconductors for wired and wireless communications.
This transaction enables Renesas and RMC to quickly exit from the LTE Modem business and focus more on their core business, while enabling Broadcom to strengthen its semiconductor business for communications. Therefore, this transaction is highly expected to improve corporate values of both parties.
Subjects to be Transferred and Purchase Price
(1) Subjects to be Transferred
All the shares of RME and RMI as well as certain assets related to the LTE Modem technology shall be transferred.
(2) Purchase Price
Expected purchase price is approximately USD 164 million including all the shares of RME and RMI as well as certain assets related to the LTE Modem technology. The final purchase price is subject to adjustment under the Definitive Agreement.
Outlook
It is uncertain at this time what impact this decision will have on the Renesas Group's consolidated financial performance in the 2nd quarter of this fiscal year and after, but we would make an immediate announcement should any impact be identified.
The content in the press release, including, but not limited to, product prices and specifications, is based on the information as of the date indicated on the document, but may be subject to change without prior notice.
Reason for Transfer
Renesas and RMC announced on June 27 that they would stop development activities and sales expansion of the 4th generation wireless modem developed by RME and RMI (hereafter "LTE Modem"), and work towards the termination of this business. After the announcement, Renesas and RMC had started performing the steps necessary to end these activities. During the process, however, Broadcom proposed Renesas and RMC to acquire the LTE Modem technology. Reviewing this proposal, Renesas and RMC reached a conclusion that it would be desirable for all the stakeholders to effect the Transfer to Broadcom, a prominent technology innovator and global leader in semiconductors for wired and wireless communications.
This transaction enables Renesas and RMC to quickly exit from the LTE Modem business and focus more on their core business, while enabling Broadcom to strengthen its semiconductor business for communications. Therefore, this transaction is highly expected to improve corporate values of both parties.
Subjects to be Transferred and Purchase Price
(1) Subjects to be Transferred
All the shares of RME and RMI as well as certain assets related to the LTE Modem technology shall be transferred.
(2) Purchase Price
Expected purchase price is approximately USD 164 million including all the shares of RME and RMI as well as certain assets related to the LTE Modem technology. The final purchase price is subject to adjustment under the Definitive Agreement.
Outlook
It is uncertain at this time what impact this decision will have on the Renesas Group's consolidated financial performance in the 2nd quarter of this fiscal year and after, but we would make an immediate announcement should any impact be identified.
The content in the press release, including, but not limited to, product prices and specifications, is based on the information as of the date indicated on the document, but may be subject to change without prior notice.
