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Renesas Electronics announced its acquisition offer for Sequans in September, which was originally set to expire at 11:59 PM New York time on January 22, 2024. This deadline has now been extended to February 5, allowing more time to satisfy the remaining closing conditions of the tender offer. This does not include the already agreed-upon approvals from the U.S. CFIUS, UK NSIA, and Taiwan merger control (Original press release: The tender offer was extended to allow additional time for the satisfaction of the remaining closing conditions of the tender offer, including, but not limited to, regulatory approvals (other than the previously announced CFIUS approval, NSIA approval and Taiwan merger control approval)), which means that the acquisition is still awaiting approvals from entities such as China?
It is worth mentioning that this acquisition has already been delayed previously. Furthermore, according to the press release, so far, only 41% of Sequans shares have been tendered as part of the offer, which raises questions about the transaction.
Sequans has a product portfolio based on its flagship Monarch LTE-M/NB-IoT and Calliope Cat 1 chip platforms, with global deployment capabilities, matching Renesas’ wireless product portfolio after the acquisition of Dialog Semiconductor. For 5G/4G broadband IoT applications, Sequans offers a product portfolio based on its Cassiopeia Cat 4/Cat 6 4G and high-end Taurus 5G chip platforms, optimized for low-cost residential, enterprise, and industrial applications.
Renesas Electronics Acquires Cellular IoT Chipmaker Sequans
Last August, Japanese semiconductor manufacturer Renesas Electronics agreed to acquire French cellular IoT chipmaker Sequans Electronics for $249 million. This transaction is expected to be completed in the first quarter of 2024, but it must receive formal approval from the French company’s labor committee, followed by approvals from local tax and regulatory authorities. This $249 million valuation covers all shares held by all shareholders, including U.S. shares, as well as net debt.
Sequans will integrate its cellular IoT products and IP into Renesas’ microcontrollers, microprocessors, analog, and mixed-signal front-end products. A statement from both companies said, “This acquisition will enable Renesas Electronics to immediately expand its business scope to cover a wide range of data rate WAN (Wide Area Network) markets. It will also strengthen Renesas Electronics’ already rich personal area (PAN) and local area (LAN) connectivity product portfolio.”
This acquisition is the latest in a series of acquisitions by Renesas Electronics, which previously acquired the UK power management and industrial IoT specialist Dialog (August 2021), Israeli Wi-Fi chipset and software provider Celeno (December 2021), and Austrian near-field communication (NFC) chip manufacturer Panthronics (June 2023). Founded in 2003, Sequans focuses on cellular low-power wide area network (LPWAN) solutions, particularly NB-IoT and LTE-M solutions, as well as IoT hardware based on higher power LTE-4G and 5G.
The two companies have been collaborating since 2020, combining Renesas Electronics’ embedded processors and analog front-end products with Sequans’ wireless chipsets for large-scale IoT and broadband IoT applications. Renesas stated, “Driven by the demand for smart meters, asset tracking systems, smart homes, smart cities, connected vehicles, fixed wireless access networks, and mobile computing devices,” the cellular IoT device market is expected to grow at a rate of over 10% per year.
Renesas’ offer for Sequans is $249 million, which is 42.3% higher than its closing price last week and 32.6% and 7.7% higher than the weighted average prices over the past 6 months and 12 months, respectively. Sequans will re-register in Germany before the end of 2024 (“structurally, but not operationally”), and will undergo a final shareholder vote. This transaction will make Sequans a privately held company, with its American Depositary Shares (ADS) transferred to Renesas Electronics under German regulations and no longer listed on any public market.
Renesas Electronics President and CEO Hidetoshi Shibata stated: “We are excited to elevate our partnership with Sequans to a new level. Sequans is a leader in the rapidly growing cellular IoT market, with extensive cellular IoT network coverage. The company’s technology provides Renesas Electronics with a pathway to offer extensive connectivity capabilities in IoT applications to meet evolving customer needs.”
Sequans Chairman and CEO Georges Karam stated: “We have been working closely with Renesas Electronics to meet the growing market demands of massive IoT and broadband IoT customers. As many telecom operators globally continue to invest in 5G infrastructure and expand the deployment of IoT applications, the combination with Renesas Electronics will bring tremendous opportunities to usher in a new era of seamless connectivity and digital mobility, a new era that will transform many industries.”
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