Kyoto, JAPAN, July 24, 2008 – ROHM has concluded a formal agreement with OKI Electric Industry Co, Ltd., concerning the acquisition of shares of OKI’s semiconductor business subsidiary based on a previously agreed memorandum of basic understanding. Both companies’ Boards of Directors met today to adopt the formal agreement by a resolution.
ROHM is currently estimating the impact that this transaction will have on its consolidated and non-consolidated business performance.
OKI has been pursuing a series of companywide initiatives designed to revamp its business structure to increase corporate value and gain a competitive edge in the face of intensifying global competition, including by holding internal deliberations on how the company could expand its semiconductor business. For its part, ROHM has been looking for opportunities to improve its corporate value by developing its business as an integrated device manufacturer (IDM) with a broad and competitive product portfolio. Based on this background, the two companies agreed on the transfer of OKI's semiconductor business.
Given that OKI’s semiconductor business has relatively little overlap with ROHM’s products and that the businesses’ complementary orientations can be expected to yield synergistic benefits for each, we believe that the acquisition will lead to increased revenue and profitability for both parties.
ROHM anticipates being able to reap the benefits of these synergies between both companies’ operations. Specifically, ROHM will make use of OKI’s semiconductor fabs for competitive products leveraging that company’s strengths in low power consumption, high voltage processing, digital/analog mixed processing, small-size packaging, and other technologies, while OKI will utilize ROHM’s leading-edge production processes for comparatively new products such as system LSIs and logic LSIs, for which it currently depends on outside foundries.
The acquisition will also enable both companies to enhance their sales capabilities by leveraging their domestic and overseas sales and technology/quality support networks5. Value of share transfer The price for the transfer of the equivalent of 95% of the company’s shares will be determined on the date of the split based on the agreed share value of ¥90 billion (equivalent to 100% of shares) and subject to separately agreed-upon adjustments.
The price for the transfer of the equivalent of 95% of the company’s shares will be determined on the date of the split based on the agreed share value of ¥90 billion (equivalent to 100% of shares) and subject to separately agreed-upon adjustments.
ROHM and OKI will examine the business and continue discussions with the goal of reaching a final agreement. Both companies plan to release consolidated financial projections as they are finalized.
About OKI Semiconductor
Founded in 1977 and headquartered in Sunnyvale, California, OKI Semiconductor is a division of OKI America Inc., which is a wholly owned subsidiary of OKI Semiconductor Co., Ltd. Japan. OKI Semiconductor has ISO-9000-certified manufacturing facilities in Japan and Thailand.
OKI Semiconductor designs and markets a broad line of advanced integrated circuits for telecommunications, automotive, computer, and consumer products. OKI's product lines include telecommunications, RF, speech synthesis, ASIC, microcontroller, and memory devices offered in a variety of creative packages.