January 15, 2016 / 4:48 PM / 2 years ago

Japan government fund INCJ plans Renesas sale; Nidec to bid: sources

TOKYO (Reuters) - A Japanese state-backed fund is preparing to sell at least half of chipmaker Renesas Electronics Corp, while parts maker Nidec Corp plans to bid for the assets, sources with direct knowledge of the matter said on Friday.

The logo of Renesas Electronics Corp is pictured at the company's headquarters in Tokyo, Japan, December 21, 2015. REUTERS/Toru Hanai

The Innovation Network Corporation of Japan (INCJ), which owns around 70 percent of Renesas, plans to invite offers in a bid scheduled for next month, said one source, who asked not to be identified because he was not authorized to discuss the matter publicly.

The other source said Nidec is considered the most likely buyer for now, but it was unclear whether other bidders would emerge.

Renesas was created in 2010 from a merger of NEC Corp’s chip division and Renesas Technology, which itself was established through a merger of the chip units of Hitachi Ltd and Mitsubishi Electric Corp.

Spokesmen for Renesas, Nidec, a maker of precision motors, and INCJ could not immediately be reached.

INCJ rescued cash-strapped Renesas in 2013 with a 150 billion yen ($1.3 billion) investment, giving it 69 percent of the chipmaker, with the proviso it hold onto the stake for two years. That lock-up expired at the end of September.

Its latest move into Renesas comes as it plans to invest in struggling screen maker Sharp Corp, with an eye on merging it with Japan Display in which it already owns a majority stake, sources have said.

Nidec targets 700 billion to 1 trillion yen in auto-related sales in fiscal 2020. This would make Nidec a major player in the lucrative automotive chip business at a time when cars are mounted with more and more electronics devices.

For INCJ, the deal would be a major success case with ample returns.

A wave of consolidation is reshaping the chip sector. Over $80 billion worth of mergers and acquisitions have been announced in 2015 including NXP Semiconductors’ purchase of Freescale Semiconductor Inc, and ON Semiconductor Corp’s deal for Fairchild Semiconductor International Inc

INCJ rescued a cash-strapped Renesas in 2013 with a 150 billion yen investment giving it 69 percent of the chipmaker, with the proviso it hold onto the stake for two years. That lock-up expired at the end of September.

Reporting by Taiga Uranaka and Makiko Yamazaki; Writing by William Mallard; editing by Susan Thomas

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