Renesas Electronics terminates acquisition of semiconductor company Sequans
Japanese semiconductor giant Renesas Electronics announced the cancellation of its acquisition of French semiconductor company Sequans Communications and the termination of its TOB (open trading of shares) with Sequans. On February 23, the stock price of Sequans plummeted nearly 65% to close at $0.90, setting a new historical closing low since its listing in April 2011.
Renesas Electronics recently announced the cancellation of its proposed acquisition of Sequans and the cessation of TOB implementation on Sequans, mainly due to unforeseen tax burdens arising from the acquisition of Sequans.
According to the terms of the Memorandum of Understanding, if Renesas Electronics receives confirmation from the Tokyo Regional Taxation Bureau, among other reasons, that completing the restructuring stipulated in the Memorandum of Understanding will require Renesas Electronics to recognize taxable income and pay such taxes in accordance with Japanese tax laws ("Japanese tax adverse ruling"), either party may terminate the Memorandum of Understanding. On February 15, 2024, Renesas received an unfavorable Japanese tax ruling. Therefore, Renesas Electronics exercises its right to terminate the Memorandum of Understanding, and as a result of such termination, the bidding offer is also terminated.
Renesas announced in August 2023 that it has signed a basic agreement with Sequans to acquire all of Sequans' issued common shares through TOB at a price of $0.7575 per common share and $3.03 per American Depositary Stock (ADS) (1 ADS is equivalent to 4 common shares). Renesas has been implementing the aforementioned TOB since September 2023. Previously, Renesas was expected to acquire Sequans for $249 million (approximately RMB 17.92).
Renesas pointed out that with the suspension of TOB, the previously participated Sequans common shares and ADSs will be immediately refunded.
Renesas Electronics stated that terminating the contract will not have a substantial impact on its core strategy to drive its technology into high growth industries. Renesas Electronics continues to see significant opportunities in cellular IoT technology and plans to consolidate this momentum through cooperation with Sequans.
Sequans was founded in 2003 to design and develop chips and modules for Internet of Things (IoT) devices. Sequans offers a wide range of 5G/4G cellular IoT products, including 5G NR, Cat 4, Cat 1, and LTE-M/NB IoT, providing reliable IoT wireless connectivity without the need for a gateway.
According to the terms of the Memorandum of Understanding, if Renesas Electronics receives confirmation from the Tokyo Regional Taxation Bureau, among other reasons, that completing the restructuring stipulated in the Memorandum of Understanding will require Renesas Electronics to recognize taxable income and pay such taxes in accordance with Japanese tax laws ("Japanese tax adverse ruling"), either party may terminate the Memorandum of Understanding. On February 15, 2024, Renesas received an unfavorable Japanese tax ruling. Therefore, Renesas Electronics exercises its right to terminate the Memorandum of Understanding, and as a result of such termination, the bidding offer is also terminated.
Renesas announced in August 2023 that it has signed a basic agreement with Sequans to acquire all of Sequans' issued common shares through TOB at a price of $0.7575 per common share and $3.03 per American Depositary Stock (ADS) (1 ADS is equivalent to 4 common shares). Renesas has been implementing the aforementioned TOB since September 2023. Previously, Renesas was expected to acquire Sequans for $249 million (approximately RMB 17.92).
Renesas pointed out that with the suspension of TOB, the previously participated Sequans common shares and ADSs will be immediately refunded.
Renesas Electronics stated that terminating the contract will not have a substantial impact on its core strategy to drive its technology into high growth industries. Renesas Electronics continues to see significant opportunities in cellular IoT technology and plans to consolidate this momentum through cooperation with Sequans.
Sequans was founded in 2003 to design and develop chips and modules for Internet of Things (IoT) devices. Sequans offers a wide range of 5G/4G cellular IoT products, including 5G NR, Cat 4, Cat 1, and LTE-M/NB IoT, providing reliable IoT wireless connectivity without the need for a gateway.