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Renesas to buy UK chip designer Dialog for $5.8bn

Japanese maker targets peer's 5G mobile communications technology

Renesas Electronics announced Monday that it will buy Dialog Semiconductor for 617.9 billion yen.

TOKYO -- Renesas Electronics of Japan announced Monday that it will acquire U.K. chip designer Dialog Semiconductor for 617.9 billion yen ($5.8 billion), after the two companies reached an agreement that Renesas will buy all shares of Dialog. 

Dialog has technologies for the 5G high-speed mobile communications standard. Against the backdrop of a changing business environment, including U.S.-China friction and a shortage of automotive-use semiconductor devices, Renesas, which sells mostly to automakers, aims to focus more on the 5G market, where it sees growth potential.

Dialog, which is listed on the Frankfurt Stock Exchange, has advanced technologies in power management integrated circuits. The U.K. company supplies these to Apple for its smartphones, and around 60% of its sales come from the U.S. tech giant. Recently Dialog acquired companies with Internet of Things technologies to diversify its business. 

The Japanese chipmaker has been working to strengthen its Internet of Things and data center businesses and is becoming less dependent on its automotive business. The company's nonautomotive business made up 46% of its sales in the financial year ended December 2019.

Bloomberg reported on Sunday that Renesas had made a takeover offer to Dialog. The company had been negotiating with a number of potential buyers, including Switzerland-based STMicroelectronics.

Global chipmakers are consolidating. Last September, Nvidia of the U.S. agreed to buy British chip designer Arm from Japan's SoftBank Group. The U.K.'s Competition and Markets Authority and other competition regulators are probing the $40 billion deal.

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