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Japan-Backed Fund Offers $6.2 Bln To Buy Chip Firm JSR

 |  June 26, 2023

The Japanese government-backed fund has made a deal to purchase JSR, a semiconductor materials maker, for approximately $6.4 billion in efforts to strengthen the country’s chip industry.

Japan Investment Corp (JIC) has taken a step to regain Japan’s lead in advanced chip production and maintain its edge as a maker of materials and tools used in their manufacture. This move was reported by Reuters and is a part of a series of increasingly muscular government steps oversean by the powerful trade ministry.

JIC has announced its intention to launch a tender offer in late December, with an offer of 4,350 yen per share, representing a 35% premium to Friday’s closing price, in order to take JSR private. Financing for the deal will be provided by Mizuho Bank and the Development Bank of Japan.

Related: Japan Looks To Chip Production As Part Of Stimulus Plan

Shares of JSR increased by 22%, reaching their daily limit, prior to the official announcement. This news resulted in elevated expectations of sector consolidation, leading to a 10% increase in shares for peer company Tokyo Ohka Kogyo, while Sumitomo Chemical and Shin-Etsu Chemical each experienced a 2% increase.

“Capabilities here are superb, but there are a lot of us and all of us are spending money redundantly, so we feel the opportunities for efficiency gains are significant,” JSR CEO Eric Johnson told a news conference.

Johnson, who is a foreign-born CEO of a Japanese company, stated his goal to have the company re-listed in a period of five to seven years.