Renesas Buys U.S. Chipmaker IDT in $6.7 Billion Deal

Japan’s Renesas Electronics Corp. has agreed to buy California-based Integrated Device Technology Inc. for $6.7 billion.

Renesas confirmed its interest in IDT late last month. The company will pay $49 per share, representing a premium of about 16%. The deal is expected to close by the end of June, pending regulatory clearances.

CEO Masahiro Wakasugi tells reporters that Renesas will pay for the deal with cash and bank loans. It does not plan to go to the equity markets.

Renesas derives more than half its revenue selling computer chips for automotive use and is second in that market only to NXP Semiconductors NV. The company estimates that absorbing IDT will lower costs by $80 million in two years.

San Jose-based IDT specializes in high-performance computing chips for such applications as data storage and wireless networks. Both capabilities are essential for autonomous vehicles. The company reported revenue of $843 million and net income of $124 million for the fiscal year ended March 31.

IDT’s revenue comes primarily from chips for computing (40%), communications (29%) and consumer products (20%).