Japanese semiconductor manufacturer Renesas Electronics on Monday offered nearly $6 billion to buy Apple supplier Dialog Semiconductor through an all-cash acquisition deal.
The company said Monday that it has already made an offer of 67.50 euros ($81.32) per share to acquire the UK chip designer.
Renesas Electronics said that no final decision had yet been made and there is no guarantee that the acquisition will push through. Based on its offer, Renesas Electronics will pay a total of around $5.9 billion to take over Dialog Semiconductor.
The offer price is roughly 20% higher than Dialog Semiconductor's Friday closing price of 56.12 euros. Following news of the proposed merger, Dialog Semiconductor's stock price surged to 66 euros per share on Monday's opening.
Since the start of the year, the company's stock has risen by around 25% due to the increased demand for its components from Apple and its other consumer electronics clients.
Sources familiar with the matter said that Renesas Electronics has been approached by several other suitors interested in acquiring the company. The sources said that some of those companies include STMicroelectronics NV.
Renesas Electronics is one of the world's largest suppliers of semiconductors for consumer electronics and automotive applications. The company significantly expanded its operations last year after it completed its acquisition of Integrated Device Technology, a deal valued at more than $6 billion.
According to Bloomberg, interest to acquire semiconductor companies has recently increased given the surge in demand for consumer electronics because of the coronavirus pandemic.
Bloomberg data showed that deals involving semiconductor companies more than doubled last year to about $144 billion. One of the more notable deals in the sector included the sale of SoftBank's semiconductor unit ARM Ltd for $40 billion.
Analysts said that if Dialog Semiconductor does accept Renesas Electronics' offer, the deal could draw scrutiny from UK regulators. Such a deal could have serious ramifications to the sector and the UK will likely want to protect its interests in the strategic industry.
UK regulators are currently set to launch an investigation into the Nvidia's deal for SoftBank's ARM unit. The Competition and Markets Authority previously said that it will conduct greater scrutiny of all strategic tech deals moving forward. The UK government also said that it plans to pass new rules that would allow competition watchdogs to investigate past takeovers and mergers.
