TOKYO, Japan, March 19, 2013 — Renesas Electronics Corporation (TSE:6723, “Renesas”), a premier supplier of advanced semiconductor solutions, today announced that Renesas and J-Devices Corporation (“J-Devices”) signed a definitive agreement (“DA”) to transfer Renesas subsidiaries' back-end facilities and others to J-Devices following a Memorandum of Understanding which was announced on January 30, 2013 in the news release “Renesas Electronics and J-Devices Sign Memorandum of Understanding on Transfer of Back-End Facilities”.
In this transfer, Renesas defines its wholly owned subsidiaries, Renesas Northern Japan Semiconductor, Inc. (“Renesas Northern Japan”), Renesas Kansai Semiconductor Co., Ltd. (“SKS”), Renesas Kyushu Semiconductor Corp. (“Renesas Kyushu”) and Renesas Northern Japan's wholly owned subsidiary, Hokkai Electronics Co., Ltd. (“Hokkai Electronics”) as “splitting companies in absorption-type split”. Through an absorption-type corporate split (“the corporate split”) Renesas will transfer assets, debts, other rights and obligations related to partial back-end production business of the splitting companies in absorption-type split (back-end production business of the Hakodate Factory of Renesas Northern Japan and the Fukui Factory of SKS, back-end production business and contract manufacturing service of the Kumamoto Factory of Renesas Kyushu, and production support business of Hokkai Electronics: referred to collectively below as “the business to be transferred”) to a wholly owned subsidiary that Renesas will newly establish. Then Renesas will transfer all issued shares of the subsidiary to J-Devices (This transfer is referred to below as “the transfer”).
The DA aims at building a long-term, mutually beneficial relationship between Renesas and J-Devices as strategic partners in the semiconductor production business. With today's agreement as the basis, the two companies intend to complete the transfer on June 1, 2013.
I. Purpose of the Corporate Split and the Transfer
As announced on July 3, 2012, in “Renesas Electronics Announces the Direction of Various Measures to Establish Robust and Profitable Structure”, Renesas is proceeding with the restructuring of Renesas group production facilities in Japan in order to strengthen its revenue base. As part of this process, under a production strategy in which the back-end facilities in Japan specialize in production of high-value added products with increasing outsourcing ratio as well as production ratio at Renesas overseas sites as a result, the Yonezawa Factory of Renesas Northern Japan and the Oita Factory of Renesas Semiconductor Kyushu Yamaguchi Co., Ltd. were to be maintained and strengthened, and the business to be transferred this time were to be “considered for transfer within one year” in a process of selection and focus of business operations. Accordingly, Renesas began looking for a transfer assignee with whom it could expect to build a long-term partnership that would strengthen the competitiveness of the business to be transferred and provide a high-quality, reliable supply of products.
On the other hand, as a company devoted to semiconductor assembly and test operations for customers, J-Devices believed it is of the utmost importance to expand the scale of its operation in order to strengthen cost competitiveness required for the further business growth.
Against this background, Renesas and J-Devices came to a common understanding, and reached the DA regarding the business to be transferred to J-Devices on June 1, 2013.
The Renesas products, which are related to the business to be transferred, will continue to be supplied by Renesas to customers with the quality, delivery schedules, service equal to or better than before even after the transfer.
As previously mentioned, Renesas will transfer assets, debts, other rights and obligations related to the business to be transferred to a wholly owned subsidiary that Renesas will newly establish. Then Renesas will transfer all issued shares of the subsidiary to J-Devices. The overview of the subsidiary is as follows.
II. Establishment of the Subsidiary
1. Purpose of the Establishment of the Subsidiary (Successor Company in Absorption-Type Split)
As part of the transfer, Renesas intends to integrate the business to be transferred into Renesas J Semiconductor Corporation (“successor company in absorption-type split”), which Renesas will newly establish as its wholly owned subsidiary.
2. Overview of the Subsidiary to be Established in April 2013 as a Successor Company in Absorption-Type Split
| Company Name | Renesas J Semiconductor Corporation |
|---|---|
| Location | 2-6-2, Ote-machi, Chiyoda-ku, Tokyo 100-0004, Japan |
| Representative | Akira Furuki, Representative Director and President |
| Major Operations | Research, development, design, manufacture and sale of electronic products |
| Capital | 1 million yen |
III. The Corporate Split
1. Outline of the Corporate Split
- (1) Timeline for the Corporate Split
- Approval of the splitting companies in absorption-type split for the corporate split agreement: April 2013 (planned)
- Approval of the successor company in absorption-type split for the corporate split agreement: April 2013 (planned)
- Signing of the corporate split agreement: April 2013 (planned)
- Approval of shareholders' meetings of the splitting companies in absorption-type split for the corporate split: May 2013 (planned)
- Approval of shareholders' meeting of the successor company in absorption-type split for the corporate split: May 2013 (planned)
- Effective date of the corporate split: June 1, 2013 (planned)
- (2) Method of the Corporate Split
Renesas Northern Japan, SKS, Renesas Kyushu and Hokkai Electronics will be the splitting companies in absorption-type split and Renesas J Semiconductor Corporation will be the successor company in absorption-type split.
- (3) Share Allocation in Accordance with the Corporate Split
<Corporate split of Renesas Kyushu>
Upon the corporate split, the successor company in absorption-type split will issue 3,000 common stocks and will allocate all of them to Renesas Kyushu, a splitting company in absorption-type split. In addition, Renesas Kyushu will allocate all the shares as dividend of surplus to its wholly owning parent company, Renesas.
<Corporate split of other three companies (Renesas Northern Japan, SKS, and Hokkai Electronics)>
Upon the corporate split, allocation of shares, cash and other property is not scheduled.
- (4) Share Subscription Rights and Bonds with Share Subscription Rights
The splitting companies in absorption-type split have not issued share subscription rights and bonds with share subscription rights.
- (5) Rights and Obligations Transferred to the Successor Company
Capital of the splitting companies in absorption-type split will not be changed following the corporate split while capital of the successor company in absorption-type split will be increased by 300 million yen resulting from the corporate split of Renesas Kyushu.
- (6)Rights and Obligations Transferred to the Successor Company
The successor company in absorption-type split will acquire assets, debts, other rights and obligations of the business to be transferred on the effective date of the corporation split based on the corporate split agreement with the splitting companies in absorption-type split. The transfer will be undertaken with the method of noncumulative taking of obligation.
- (7)Ability to Fulfill Obligations
Renesas concludes that both the splitting companies and the successor company in absorption-type split shall have abilities to fulfill all their debt obligations on and after the effective date of the corporate split.
2. Overview of the Splitting Companies and the Successor Company
| Splitting Company 1 | Successor Company | ||||
|---|---|---|---|---|---|
| (1) | Company Name | Renesas Northern Japan Semiconductor, Inc. | Renesas J Semiconductor Corporation | ||
| (2) | Location | 145, Aza-Nakajima, Nanae-cho, Kameda-gun, Hokkaido, 041-1196, Japan | 2-6-2, Ote-machi, Chiyoda-ku, Tokyo 100-0004, Japan | ||
| (3) | Representative | Kosuke Tanaka, Representative Director and President | Akira Furuki, Representative Director and President | ||
| (4) | Major Operations | Research, development, design, manufacture and sale of semiconductor and IC products | Research, development, design, manufacture and sale of electronic products | ||
| (5) | Capital | 2,550 million yen | 1 million yen | ||
| (6) | Established | May 30, 1970 | April, 2013 (planned) | ||
| (7) | Number of Shares Issued | 6,648,000 | — | ||
| (8) | Fiscal Term | March 31 | March 31 | ||
| (9) | Employees | — | — | ||
| (10) | Main Client | — | — | ||
| (11) | Main Bank | — | — | ||
| (12) | Major Shareholders and Equity Ratio | Renesas Electronics Corporation 100% | Renesas Electronics Corporation 100% | ||
| (13) | The financial results and financial position of the splitting company for the past three years | ||||
| Accounting Period | Fiscal year ended March 2010 | Fiscal year ended March 2011 | Fiscal year ended March 2012 | ||
| Net Asset | 9,380 million yen | 9,827 million yen | 8,031 million yen | ||
| Total Asset | 31,335 million yen | 30,421 million yen | 31,117 million yen | ||
| Net Asset Per Share | 1,410.88 yen | 1,478.16 yen | 1,208.06 yen | ||
| Net Sales | 44,318 million yen | 48,562 million yen | 41,536 million yen | ||
| Operating Income | 1,162 million yen | 2,143 million yen | -814 million yen | ||
| Ordinary Income | 1,043 million yen | 2,064 million yen | -885 million yen | ||
| Net Income | 1,901 million yen | 447 million yen | -1,796 million yen | ||
| Net Income Per Share | 285.94 yen | 67.27 yen | -270.09 yen | ||
| Dividends Per Share | — | — | — | ||
| Splitting Company 2 | Successor Company | ||||
|---|---|---|---|---|---|
| (1) | Company Name | Renesas Kansai Semiconductor Co., Ltd. | Renesas J Semiconductor Corporation | ||
| (2) | Location | 2-9-1 Seiran, Otsu-shi, Shiga 520-8555, Japan | 2-6-2, Ote-machi, Chiyoda-ku, Tokyo 100-0004, Japan | ||
| (3) | Representative | Yasuhiro Funakoshi, Representative Director and President | Akira Furuki, Representative Director and President | ||
| (4) | Major Operations | Research, development, design, manufacture and sale of semiconductor and IC products | Research, development, design, manufacture and sale of electronic products | ||
| (5) | Capital | 1,000 million yen | 1 million yen | ||
| (6) | Established | July 1, 1983 | April, 2013 (planned) | ||
| (7) | Number of Shares Issued | 20,000 | — | ||
| (8) | Fiscal Term | March 31 | March 31 | ||
| (9) | Employees | — | — | ||
| (10) | Main Client | — | — | ||
| (11) | Main Bank | — | — | ||
| (12) | Major Shareholders and Equity Ratio | Renesas Electronics Corporation 100% | Renesas Electronics Corporation 100% | ||
| (13) | The financial results and financial position of the splitting company for the past three years | ||||
| Accounting Period | Fiscal year ended March 2010 | Fiscal year ended March 2011 | Fiscal year ended March 2012 | ||
| Net Asset | 1,871 million yen | 1,866 million yen | 560 million yen | ||
| Total Asset | 56,987 million yen | 53,309 million yen | 45,524 million yen | ||
| Net Asset Per Share | 93,555.32 yen | 93,312.14 yen | 28,016.53 yen | ||
| Net Sales | 85,991 million yen | 68,065 million yen | 55,121 million yen | ||
| Operating Income | 7,641 million yen | 1,547 million yen | 582 million yen | ||
| Ordinary Income | 6,540 million yen | 184 million yen | -639 million yen | ||
| Net Income | 3,584 million yen | -3.7 million yen | -1,307 million yen | ||
| Net Income Per Share | 179,219.92 yen | -185.74 yen | -65,325.00 yen | ||
| Dividends Per Share | — | — | — | ||
| Splitting Company 3 | Successor Company | ||||
|---|---|---|---|---|---|
| (1) | Company Name | Renesas Kyushu Semiconductor Corp. | Renesas J Semiconductor Corporation | ||
| (2) | Location | 272-10, Oaza-Takaono, Ozu-machi, Kikuchi-gun, Kumamoto, 869-1232, Japan | 2-6-2, Ote-machi, Chiyoda-ku, Tokyo 100-0004, Japan | ||
| (3) | Representative Director | Akira Furuki, Representative Director and President | Akira Furuki, Representative Director and President | ||
| (4) | Major Operations | Research, development, design, manufacture and sale of semiconductor and IC products | Research, development, design, manufacture and sale of electronic products | ||
| (5) | Capital | 500 million yen | 1 million yen | ||
| (6) | Established | August 1, 1991 | April, 2013 (planned) | ||
| (7) | Number of Shares Issued | 7,000 | — | ||
| (8) | Fiscal Term | March 31 | March 31 | ||
| (9) | Employees | — | — | ||
| (10) | Main Client | — | — | ||
| (11) | Main Bank | — | — | ||
| (12) | Major Shareholders and Equity Ratio | Renesas Electronics Corporation 100% | Renesas Electronics Corporation 100% | ||
| (13) | The financial results and financial position of the splitting company for the past three years | ||||
| Accounting Period | Fiscal year ended March 2010 | Fiscal year ended March 2011 | Fiscal year ended March 2012 | ||
| Net Asset | 1,494 million yen | 1,747 million yen | 1,124 million yen | ||
| Total Asset | 20,863 million yen | 22,012 million yen | 18,232 million yen | ||
| Net Asset Per Share | 213,396.76 yen | 249,618.47 yen | 160,634.74 yen | ||
| Net Sales | 31,506 million yen | 30,890 million yen | 24,791 million yen | ||
| Operating Income | 471 million yen | 572 million yen | -348 million yen | ||
| Ordinary Income | 367 million yen | 468 million yen | -493 million yen | ||
| Net Income | 241 million yen | 253 million yen | -623 million yen | ||
| Net Income Per Share | 34,447.75 yen | 36,221.71 yen | -88,983.73 yen | ||
| Dividends Per Share | — | — | — | ||
| Splitting Company 4 | Successor Company | ||||
|---|---|---|---|---|---|
| (1) | Company Name | Hokkai Electronics Co., Ltd. | Renesas J Semiconductor Corporation | ||
| (2) | Location | 289-12, Higashi-cho, Yakumo-cho, Futami-gun, Hokkaido, 049-3102, Japan | 2-6-2, Ote-machi, Chiyoda-ku, Tokyo 100-0004, Japan | ||
| (3) | Representative | Keiichi Nakamura, Representative Director and President | Akira Furuki, Representative Director and President | ||
| (4) | Major Operations | Manufacture and sale of IC products | Research, development, design, manufacture and sale of electronic products | ||
| (5) | Capital | 20 million yen | 1 million yen | ||
| (6) | Established | November 2, 1978 | April, 2013 (planned) | ||
| (7) | Number of Shares Issued | 400 | — | ||
| (8) | Fiscal Term | March 31 | March 31 | ||
| (9) | Employees | — | — | ||
| (10) | Main Client | — | — | ||
| (11) | Main Bank | — | — | ||
| (12) | Major Shareholders and Equity Ratio | Renesas Northern Japan Semiconductor, Inc. 100% | Renesas Electronics Corporation 100% | ||
| (13) | The financial results and financial position of the splitting company for the past three years | ||||
| Accounting Period | Fiscal year ended March 2010 | Fiscal year ended March 2011 | Fiscal year ended March 2012 | ||
| Net Asset | 62 million yen | 70 million yen | 75 million yen | ||
| Total Asset | 215 million yen | 210 million yen | 198 million yen | ||
| Net Asset Per Share | 156,517.50 yen | 175,405.00 yen | 188,185.00 yen | ||
| Net Sales | 308 million yen | 310 million yen | 262 million yen | ||
| Operating Income | 13 million yen | 20 million yen | 18 million yen | ||
| Ordinary Income | 16 million yen | 20 million yen | 16 million yen | ||
| Net Income | 3 million yen | 7 million yen | 5 million yen | ||
| Net Income Per Share | 8,139.99 yen | 18,888.64 yen | 12,779.84 yen | ||
| Dividends Per Share | — | — | — | ||
3. Overview of the Business to be Carved out through the Corporate Split
(1) Business to be Carved out
Hakodate Factory of Renesas Northern Japan: Semiconductor back-end production business Fukui Factory of SKS: Semiconductor back-end production business Kumamoto Factory of Renesas Kyushu: Semiconductor back-end production business and contract manufacturing service Hokkai Electronics: Support business of semiconductor back-end production
(2) Financial Results of Divisions to be Carved out
A. Hakodate Factory of Renesas Northern Japan
| Fiscal year ended March 2011 | Fiscal year ended March 2012 | |
|---|---|---|
| Sales* | 25,782 million yen | 30,960 million yen |
B. Fukui Factory of SKS
| Fiscal year ended March 2011 | Fiscal year ended March 2012 | |
|---|---|---|
| Sales* | 35,017 million yen | 25,422 million yen |
C. Kumamoto Factory of Renesas Kyushu
| Fiscal year ended March 2011 | Fiscal year ended March 2012 | |
|---|---|---|
| Sales* | 50,208 million yen | 56,293 million yen |
D. Hokkai Electronics
| Fiscal year ended March 2011 | Fiscal year ended March 2012 | |
|---|---|---|
| Sales* | 310 million yen | 262 million yen |
*Above sales include the value of chips and others which Renesas provides to each splitting company