Yageo secures FDI clearance for tender offer to buy Japan firm

Taipei, Sept. 3 (CNA) Taiwan's Yageo Corp., the world's third-largest maker of multilayer ceramic capacitors (MLCC), has secured foreign direct investment (FDI) clearance from Japanese authorities for its tender offer to acquire Japan-based Shibaura Electronics Co.

In a statement Tuesday, Yageo said the FDI clearance, granted by authorities including Japan's Ministry of Economy, Trade and Industry under the Foreign Exchange and Foreign Trade Act, was the only regulatory closing condition related to the tender offer.

The approval clears the way for Yageo to complete the deal to acquire Shibaura, which it has described as a "globally recognized" maker of negative temperature coefficient (NTC) thermistors.

Yageo said the regulatory approval reflected, in part, the attractiveness of its acquisition price of 7,130 Japanese yen (US$47.94) per Shibaura share, which represents a significant premium over the bid of a competing tender offer.

On May 9, Yageo launched a tender offer to acquire Shibaura at 6,200 yen per share -- a 14.8 percent increase from its previous offer of 5,400 yen. That move came after Japanese rival MinebeaMitsumi Inc. raised its bid to 5,500 yen from 4,500 yen.

With MinebeaMitsumi continuing to raise its bid, Yageo followed suit, boosting its offer to 6,635 yen on Aug. 21 and 7,130 yen on Aug. 23.

To comply with Japan's regulatory process, Yageo has extended the tender offer deadline several times. On Tuesday, the deadline was extended again to Sept. 18 from Sept. 8, the company said.

Despite the extension, Yageo said completion of the tender offer remained scheduled for the end of the third quarter.

The company said the FDI clearance strengthened its confidence in the deal, easing concerns raised by a recent MinebeaMitsumi statement that questioned "the possibility of Yageo's tender offer being successfully completed."

Yageo said it is committed to protecting Shibaura's core technologies while leveraging its global sales network and client connections to market Shibaura's products worldwide.

The company pledged to ensure a fair and transparent tender process and to disclose all legally permissible information to Shibaura's shareholders so they can make independent decisions.

Yageo added that it believes it can "provide Shibaura's employees with the best global platform for development and opportunities."

Founded in 1977, Yageo has pursued growth through acquisitions in recent years, focusing on high-end passive component development.

Among its past deals, Yageo bought U.S.-based Pulse Electronics Corp. for NT$22 billion (US$715 million) in 2018, cementing its MLCC status, and acquired American counterpart Kemet Corp. for US$1.64 billion in 2020.

In 2023, Yageo acquired Schneider Electric's French-based Telemecanique Sensors in an all-cash deal worth 686 million euros (US$795 million) to strengthen its specialty electronics component business.