Toyota, Honda, Nissan, others propose Renesas rescue, report says
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TOKYO (Reuters) -- A rescue of Renesas Electronics is being organized by a consortium of Japanese companies led by Toyota Motor Corp., with the backing of a state-run fund, to counter a bid for the chipmaker by the U.S.-based private equity firm KKR, the Nikkei business daily reported on Saturday.
The group wants to invest 100 billion yen ($1.3 billion) in Renesas to acquire a majority stake in the company before the end of the year, the Nikkei said, without providing further details on how it obtained the information.
The group, it said, included the government's Innovation Network Corp., Panasonic Corp., Nissan Motor Co., Honda Motor Co., Canon Inc., Fanuc Corp. and auto parts makers Denso Corp. and Keihin Corp. Denso is affiliated with Toyota.
KKR is also in talks to invest around 100 billion yen in Renesas, which would be its largest investment in Japan, sources last month told Reuters. That deal would give KKR more than 50 percent of cash-strapped Renesas, and could speed the pace of its restructuring in the face of sinking prices and aggressive overseas rivals.
The competing deal from the Japanese group, which may invite German industrial group Bosch GmbH to join it, would be presented to Renesas shareholders, NEC Corp., Hitachi Ltd. and Mitsubishi Electric Corp. next month, the Nikkei said.
A spokesman for Toyota declined to comment on the report. Renesas in a statement said it had not released the information.
Being customers of Renesas, Toyota and other Japanese manufacturers might be persuaded to help the chip maker in order to secure their supply chains, an industry source told Reuters on condition he was not identified.
KKR 'just wants to break it up'
KKR "just wants to break it up and make money. They don't care about the supply chain," he said.
Officials at the three owners, who asked not to be identified, said they were unaware of the bid. One source at a financial firm said the plan that counters KKR could take several months to devise.
Renesas, the world's leading manufacturer of microcontroller chips used in cars, is laying off 12 percent of its workforce and plans to sell or consolidate half of its domestic plants.
If KKR wins the bid, it would be among the top 10 biggest private equity investments into the world's third largest economy. Run by cousins and private equity pioneers Henry Kravis and George Roberts, KKR has operated in Asia since 2006. Its only purchase in Japan to date is the 2010 acquisition of recruitment services company Intelligence from Usen Corp for $357 million.
KKR's bid is the second this year in Japan by a foreign private equity firm in a Japanese chipmaker, after China's Hony Capital and U.S. buyout fund TPG Capital teamed up to bid for Elpida Memory Inc.
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