TOKYO, Japan, July 29, 2013 — Renesas Electronics Corporation (“Renesas Electronics” or “the Company,” TSE: 6723), a premier supplier of advanced semiconductor solutions, provided notification of the implementation of “measures including the optimization of the personnel structure while slimming down and improving the efficiency of the organization, as well as restructuring of Renesas Electronics subsidiaries” (referred to below as “the reorganization”) in “Renesas Electronics Announces the Implementation of Further Rationalization Initiatives, Including Optimization of the Personnel Structure,” released on January 17. The specifics of the reorganization (mergers involving Renesas Electronics and its subsidiaries, and changes to names of subsidiaries) were approved today by the Board of Directors, and the details are provided below.
Note that because the reorganization involves Renesas Electronics and its wholly-owned subsidiaries, some information is omitted from the items and details disclosed here.
I. Purpose and Details of the Reorganization
1. Purpose of the ReorganizationBased on the direction of actions announced on July 3, 2012, in “Renesas Electronics Announces the Direction of Various Measures to Establish Robust and Profitable Structure,” the Company has proceeded according to plan with efforts to secure support and capital from major shareholders and main banks, personnel rationalization measures centered around an early retirement incentive program, the restructuring of production facilities in Japan, and other initiatives. In addition, the Company is implementing measures aimed at assuring future growth, as announced on December 10, 2012, in “Renesas Electronics Announces Share Issue through Third-Party Allotment, and Change in Major Shareholders, Largest Shareholder who is a Major Shareholder, Parent Company and Other Related Companies.” Against this background, the Company will carry out the reorganization described below to rebuild the design, development, production, and sales structures within the Renesas Group and enable the Company to further boost competitiveness through measures including strengthening the revenue base by improving the cost structure; speeding up decision-making; and achieving increased adequacy and efficiency in our business operations.
2. Details of the Reorganization(1) Renesas Electronics will absorb its wholly-owned subsidiary Renesas Electronics Sales Co., Ltd. (“Renesas Sales”) in an absorption-type merger.
(2) Renesas Micro Systems Co., Ltd. (“RMS”) will absorb Renesas Design Corp. (“RDC”) in an absorption-type merger, and the company name will be changed to Renesas Systems Design Corp. (“RSD”). Both partners to the merger are design and application technology companies and wholly-owned subsidiaries of Renesas Electronics.
(3) Renesas Musashi Engineering Services, Co., Ltd. (“Musashi ES”) will absorb Renesas Kitaitami Engineering Services Co., Ltd. (“Kita ES”) and Renesas Takasaki Engineering Service Co., Ltd. (“Takasaki ES”) in an absorption-type merger, and the company name will be changed to Renesas Engineering Services Co., Ltd. (“REG”). All partners to the merger are design support companies and wholly-owned subsidiaries of Renesas Electronics.
(4) Renesas Northern Japan Semiconductor, Inc. (“Northern Japan Semiconductor”) will absorb Renesas Eastern Japan Semiconductor, Inc. (“Eastern Japan Semiconductor”) in an absorption-type merger. Both partners to the merger are production companies and wholly-owned subsidiaries of Renesas Electronics.
II. Absorption-Type Merger with Renesas Electronics as the Surviving Company and Renesas Sales as the Absorbed Company
1. Summary of the Merger(1) Schedule| Resolution by Board of Directors (Renesas Electronics) | July 29, 2013 |
|---|---|
| Resolution by Board of Directors (Renesas Sales) | July 29, 2013 |
| Conclusion of merger agreement | July 29, 2013 |
| Implementation date (effective date) | October 1, 2013 (anticipated) |
Note: Renesas Electronics plans to implement the merger agreement as a simple merger that does not require approval by a general meeting of stockholders, as stipulated in Article 796, Paragraph 3 of the Companies Act. The consolidated subsidiary plans to implement the merger agreement as a short-form merger that does not require approval by a general meeting of stockholders, as stipulated in Article 784, Paragraph 1 of the Companies Act.
(2) Method of the Merger
The absorption-type merger method will apply, with Renesas Electronics as the surviving company and Renesas Sales as the absorbed company.
(3) Allotment of Shares and Monies in the Merger
Renesas Electronics owns all the issued shares of the consolidated subsidiary (Renesas Sales) that is the other party to the merger agreement, so no allotment of shares, monies, etc., will occur as a result of the merger.
(4) Handling of Share Options and Bonds with Share Options Issued by the Absorbed Company
There are no relevant items to report.
2. Outline of Companies Party to the Merger (Current as of March 31, 2013)| (1) | Company name | Renesas Electronics Corporation (surviving company) |
|---|---|---|
| (2) | Location | 1753 Shimonumabe, Nakahara-ku, Kawasaki, Kanagawa, Japan |
| (3) | Posts and names of representatives (As of June 26, 2013) | Hisao Sakuta, Representative Director, Chairman and CEO Tetsuya Tsurumaru, Representative Director, President and COO |
| (4) | Main business | Research, development, design, manufacture, sale, and servicing of semiconductor products |
| (5) | Amount of capital | ¥153.255 billion |
| (6) | Established | November 1, 2002 |
| (7) | Number of issued shares | 417,124,000 |
| (8) | End of fiscal year | March 31 |
| (9) | Major shareholders and percentage of shares held | Japan Trustee Services Bank, Ltd.: 32.43% Hitachi, Ltd.: 30.62% Mitsubishi Electric Corporation: 25.05% NEC Corporation: 3.01% |
| (10) | Consolidated net assets | ¥77.924 billion |
| (11) | Consolidated total assets | ¥669.104 billion |
| (12) | Consolidated net assets per share | ¥160.01 |
| (13) | Consolidated sales | ¥785.764 billion |
| (14) | Consolidated operating profit (loss) | ¥(23.217) billion |
| (15) | Consolidated pretax profit (loss) | ¥(26.862) billion |
| (16) | Consolidated net income (loss) | ¥(167.581) billion |
| (17) | Consolidated net income (loss) per share | ¥(401.76) |
| (1) | Company name | Renesas Electronics Sales Co., Ltd. (absorbed company) |
|---|---|---|
| (2) | Location | 2-6-2, Ote-machi, Chiyoda-ku, Tokyo, Japan (Nippon Building) |
| (3) | Post and name of representative | Yoshihiko Miura, President |
| (4) | Main business | Sale of electronic components such as semiconductor devices and integrated circuits; sale of electronic equipment and communications equipment; software development, design, manufacture, sale, maintenance, and consulting related to the preceding |
| (5) | Amount of capital | ¥2.5 billion |
| (6) | Established | April 1, 2003 |
| (7) | Number of issued shares | 5,000,000 |
| (8) | End of fiscal year | March 31 |
| (9) | Major shareholders and percentage of shares held | Renesas Electronics Corporation: 100% |
| (10) | Net assets | ¥14.906 billion |
| (11) | Total assets | ¥62.769 billion |
| (12) | Net assets per share | ¥2981.30 |
| (13) | Sales | ¥383.787 billion |
| (14) | Operating profit | ¥1.128 billion |
| (15) | Pretax profit | ¥1.884 billion |
| (16) | Net income | ¥1.172 billion |
| (17) | Net income per share | ¥234.58 |
Following the merger, there will be no changes to the company name, location, representatives, main business, amount of capital, and fiscal year of the above company. (This does not apply to the company absorbed in the merger, which will be dissolved.)
III. Absorption-Type Merger with RMS as the Surviving Company and RDC as the Absorbed Company
1. Summary of the Merger
(1) Schedule
| Resolution by Board of Directors (RMS) | July 29, 2013 |
|---|---|
| Resolution by Board of Directors (RDC) | July 29, 2013 |
| Conclusion of merger agreement | July 29, 2013 |
| Resolution by general meeting of shareholders (RMS) | September 2, 2013 (anticipated) |
| Resolution by general meeting of shareholders (RDC) | September 2, 2013 (anticipated) |
| Implementation date (effective date) | October 1, 2013 (anticipated) |
(2) Method of the Merger
The absorption-type merger method will apply, with RMS as the surviving company and RDC as the absorbed company.
(3) Allotment of Shares and Monies in the Merger
Both parties to the merger agreement are consolidated subsidiaries of Renesas Electronics, so no allotment of shares, monies, etc., will occur as a result of the merger.
(4) Handling of Share Options and Bonds with Share Options Issued by the Absorbed Company
There are no relevant items to report.
2. Outline of Companies Party to the Merger (Current as of March 31, 2013)
| (1) | Company name | Renesas Micro Systems Co., Ltd. (surviving company) |
|---|---|---|
| (2) | Location | 3-1, Kinko-cho, Kanagawa-ku, Yokohama, Kanagawa Pref., Japan |
| (3) | Post and name of representative | Hiroshi Iguchi, President |
| (4) | Main business | MCU development and design; SoC development and design; core development and design of analog, IP, and memory devices; ASIC development and design; base technology development and design; design and development of MCU and SoC development tools; etc. |
| (5) | Amount of capital | ¥400 million |
| (6) | Established | May 23, 1980 |
| (7) | Number of issued shares | 800,000 |
| (8) | End of fiscal year | March 31 |
| (9) | Major shareholders and percentage of shares held | Renesas Electronics Corporation: 100% |
| (10) | Net assets | ¥3.242 billion |
| (11) | Total assets | ¥15.310 billion |
| (12) | Net assets per share | ¥4053.24 |
| (13) | Sales | ¥16.066 billion |
| (14) | Operating profit | ¥1.460 billion |
| (15) | Pretax profit | ¥1.427 billion |
| (16) | Net income | ¥357 million |
| (17) | Net income per share | ¥446.97 |
| (1) | Company name | Renesas Design Corp. (absorbed company) |
|---|---|---|
| (2) | Location | 4-1-3, Mizuhara, Itami, Hyogo Pref., Japan |
| (3) | Post and name of representative | Hideharu Takebe, President |
| (4) | Main business | MCU design; system on chip (SoC) design; mixed signal device design; LCD driver design; design of general-purpose ICs and discrete semiconductor devices; development of EDA technology and IP; software technology |
| (5) | Amount of capital | ¥400 million |
| (6) | Established | December 1, 1982 |
| (7) | Number of issued shares | 8,000 |
| (8) | End of fiscal year | March 31 |
| (9) | Major shareholders and percentage of shares held | Renesas Electronics Corporation: 100% |
| (10) | Net assets | ¥2.507 billion |
| (11) | Total assets | ¥6.604 billion |
| (12) | Net assets per share | ¥313,476.47 |
| (13) | Sales | ¥7.959 billion |
| (14) | Operating profit | ¥736 million |
| (15) | Pretax profit | ¥759 million |
| (16) | Net income | ¥494 million |
| (17) | Net income per share | ¥61,858.59 |
3. Change to Name of Surviving Company
(1) New Name
Renesas Systems Design Corp.
(2) Date of Name Change
October 1, 2013 (anticipated)
(3) Reason for Name Change
The name change is intended to enable the company resulting from the merger to make a new start as a design and development company with a stronger focus on systems design.
4. Situation Following the Merger
| Company name | Renesas Systems Design Corp. |
|---|---|
| Headquarters location | 3-1, Kinko-cho, Kanagawa-ku, Yokohama, Kanagawa Pref., Japan |
| Representative | Undecided |
| Main business | MCU development and design; SoC development and design; core development and design of analog, IP, and memory devices; ASIC development and design; base technology development and design; design and development of MCU and SoC development tools; etc. |
| Amount of capital | ¥400 million |
| End of fiscal year | March 31 |
IV. Absorption-Type Merger with Musashi ES as the Surviving Company and Kita ES and Takasaki ES as the Absorbed Companies
1. Summary of the Merger
(1) Schedule
| Resolution by Board of Directors (Musashi ES) | July 29, 2013 |
|---|---|
| Resolution by Board of Directors (Kita ES) | July 29, 2013 |
| Resolution by Board of Directors (Takasaki ES) | July 29, 2013 |
| Conclusion of merger agreement | July 29, 2013 |
| Resolution by general meeting of shareholders (Musashi ES) | September 2, 2013 (anticipated) |
| Resolution by general meeting of shareholders (Kita ES) | September 2, 2013 (anticipated) |
| Resolution by general meeting of shareholders (Takasaki ES) | September 2, 2013 (anticipated) |
| Implementation date (effective date) | October 1, 2013 (anticipated) |
(2) Method of the Merger
The absorption-type merger method will apply, with Musashi ES as the surviving company and Kita ES and Takasaki ES as the absorbed companies.
(3) Allotment of Shares and Monies in the Merger
All parties to the merger agreement are consolidated subsidiaries of Renesas Electronics, so no allotment of shares, monies, etc., will occur as a result of the merger.
(4) Handling of Share Options and Bonds with Share Options Issued by the Absorbed Company
There are no relevant items to report.
2. Outline of Companies Party to the Merger (Current as of March 31, 2013)
| (1) | Company name | Renesas Musashi Engineering Services, Co., Ltd. (surviving company) |
|---|---|---|
| (2) | Location | 5-20-1, Josuihon-cho, Kodaira, Tokyo, Japan |
| (3) | Post and name of representative | Toshiyuki Abutsuka, President |
| (4) | Main business | Design support business; quality and reliability engineering; development and operation of information systems; etc. |
| (5) | Amount of capital | ¥50 million |
| (6) | Established | April 1, 1998 |
| (7) | Number of issued shares | 500 |
| (8) | End of fiscal year | March 31 |
| (9) | Major shareholders and percentage of shares held | Renesas Electronics Corporation: 100% |
| (10) | Net assets | ¥597 million |
| (11) | Total assets | ¥2.196 billion |
| (12) | Net assets per share | ¥1,194,526 |
| (13) | Sales | ¥4.765 billion |
| (14) | Operating profit | ¥412 million |
| (15) | Pretax profit | ¥429 million |
| (16) | Net income | ¥269 million |
| (17) | Net income per share | ¥538,842 |
| (1) | Company name | Renesas Kitaitami Engineering Services Co., Ltd. (absorbed company) |
|---|---|---|
| (2) | Location | 3-5-8, Higashi Tada, Kawanishi, Hyogo Pref., Japan |
| (3) | Post and name of representative | Hideaki Arima, President |
| (4) | Main business | Testing and analysis of semiconductor devices and electronic components; manufacture and sale of equipment and components for testing and analysis; etc. |
| (5) | Amount of capital | ¥50 million |
| (6) | Established | April 2, 2007 |
| (7) | Number of issued shares | 1,000 |
| (8) | End of fiscal year | March 31 |
| (9) | Major shareholders and percentage of shares held | Renesas Electronics Corporation: 100% |
| (10) | Net assets | ¥408 million |
| (11) | Total assets | ¥897 million |
| (12) | Net assets per share | ¥407,036.16 |
| (13) | Sales | ¥1.326 billion |
| (14) | Operating profit | ¥187 million |
| (15) | Pretax profit | ¥190 million |
| (16) | Net income | ¥129 million |
| (17) | Net income per share | ¥129,606.74 |
| (1) | Company name | Renesas Takasaki Engineering Service Co., Ltd. (absorbed company) |
|---|---|---|
| (2) | Location | 111, Nishiyokote-machi, Takasaki, Gunma Pref., Japan |
| (3) | Post and name of representative | Sho Komiyama, President |
| (4) | Main business | Design support business; quality assurance business; semiconductor manufacturing-related business; IT solution business; etc. |
| (5) | Amount of capital | ¥50 million |
| (6) | Established | July 2, 1999 |
| (7) | Number of issued shares | 400 |
| (8) | End of fiscal year | March 31 |
| (9) | Major shareholders and percentage of shares held | Renesas Electronics Corporation: 100% |
| (10) | Net assets | ¥326 million |
| (11) | Total assets | ¥687 million |
| (12) | Net assets per share | ¥816,897.5 |
| (13) | Sales | ¥2.029 billion |
| (14) | Operating profit | ¥327 million |
| (15) | Pretax profit | ¥330 million |
| (16) | Net income | ¥183 million |
| (17) | Net income per share | ¥458,295 |
3. Change to Name of Surviving Company
(1) New Name
Renesas Engineering Services Co., Ltd.
(2) Date of Name Change
October 1, 2013 (anticipated)
(3) Reason for Name Change
The parties to the merger previously operated as regional design support companies, but a new name containing no regional referents is being adopted to reflect the fact that the newly integrated company resulting from the merger will provide design support for all of Renesas Electronics.
4. Situation Following the Merger
| Company name | Renesas Engineering Services Co., Ltd. |
|---|---|
| Headquarters location | 5-20-1, Josuihon-cho, Kodaira, Tokyo, Japan (currently headquarters of Musashi ES) |
| Representative | Undecided |
| Main business | Design support business; quality assurance business; evaluation and analysis business; development and operation of information systems; etc. |
| Amount of capital | ¥50 million |
| End of fiscal year | March 31 |
V. Absorption-Type Merger with Northern Japan Semiconductor as the Surviving Company and Eastern Japan Semiconductor as the Absorbed Company
1. Summary of the Merger
(1) Schedule
| Resolution by Board of Directors (Northern Japan Semiconductor) | July 29, 2013 |
|---|---|
| Resolution by Board of Directors (Eastern Japan Semiconductor) | July 29, 2013 |
| Conclusion of merger agreement | July 29, 2013 |
| Resolution by general meeting of shareholders (Northern Japan Semiconductor) | September 2, 2013 (anticipated) |
| Resolution by general meeting of shareholders (Eastern Japan Semiconductor) | September 2, 2013 (anticipated) |
| Implementation date (effective date) | October 1, 2013 (anticipated) |
(2) Method of the Merger
The absorption-type merger method will apply, with Northern Japan Semiconductor as the surviving company and Eastern Japan Semiconductor as the absorbed company.
(3) Allotment of Shares and Monies in the Merger
Both parties to the merger agreement are consolidated subsidiaries of Renesas Electronics, so no allotment of shares, monies, etc., will occur as a result of the merger.
(4) Handling of Share Options and Bonds with Share Options Issued by the Absorbed Company
There are no relevant items to report.
2. Outline of Companies Party to the Merger (Current as of March 31, 2013)| (1) | Company name | Renesas Northern Japan Semiconductor, Inc. (surviving company) |
|---|---|---|
| (2) | Location | 5-11-3, Shinbashi, Minato-ku, Tokyo 105-0004, Japan (moved on June 1, 2013) |
| (3) | Post and name of representative | Masashi Mori, President |
| (4) | Main business | Semiconductor back-end production and contact manufacturing |
| (5) | Amount of capital | ¥2.55 billion |
| (6) | Established | October 1, 2002 |
| (7) | Number of issued shares | 6,648,000 |
| (8) | End of fiscal year | March 31 |
| (9) | Major shareholders and percentage of shares held | Renesas Electronics Corporation: 100% |
| (10) | Consolidated net assets | ¥7.720 billion |
| (11) | Consolidated total assets | ¥19.297 billion |
| (12) | Consolidated net assets per share | ¥1,161.27 |
| (13) | Consolidated sales | ¥31.914 billion |
| (14) | Consolidated operating profit | ¥1.379 billion |
| (15) | Consolidated pretax profit | ¥1.991 billion |
| (16) | Consolidated net income | ¥188 million |
| (17) | Consolidated net income per share | ¥28.42 |
| (1) | Company name | Renesas Eastern Japan Semiconductor, Inc. (absorbed company) |
|---|---|---|
| (2) | Location | 2-14-1, Kyobashi, Chuo-ku, Tokyo, Japan |
| (3) | Post and name of representative | Hideyuki Todokoro, President |
| (4) | Main business | Semiconductor development, design, production, and sales |
| (5) | Amount of capital | ¥400 million |
| (6) | Established | October 1, 2002 |
| (7) | Number of issued shares | 4,440,000 |
| (8) | End of fiscal year | March 31 |
| (9) | Major shareholders and percentage of shares held | Renesas Electronics Corporation: 100% |
| (10) | Consolidated net assets | ¥6.008 billion |
| (11) | Consolidated total assets | ¥10.114 billion |
| (12) | Consolidated net assets per share | ¥1,353.3 |
| (13) | Consolidated sales | ¥9.767 billion |
| (14) | Consolidated operating profit (loss) | ¥(266) million |
| (15) | Consolidated pretax profit (loss) | ¥(69) million |
| (16) | Consolidated net income | ¥135 million |
| (17) | Consolidated net income per share | ¥30.45 |
3. Situation Following the Merger
| Company name | Renesas Northern Japan Semiconductor, Inc. |
|---|---|
| Headquarters location | 2-14-1, Kyobashi, Chuo-ku, Tokyo, Japan (currently headquarters of Eastern Japan Semiconductor) |
| Representative | Undecided |
| Main business | Semiconductor back-end production and contact manufacturing |
| Amount of capital | ¥2.55 billion |
| End of fiscal year | March 31 |
VI. Outlook Moving Forward
The reorganization outlined above involves Renesas Electronics and its wholly-owned subsidiaries, so its impact on consolidated business performance is expected to be negligible.
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.