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TMCNet:  Renesas Electronics Announces Absorption-Type Merger (Simplified/Short-Form Merger) With Consolidated Subsidiary and Debt Waiver

[July 28, 2014]

Renesas Electronics Announces Absorption-Type Merger (Simplified/Short-Form Merger) With Consolidated Subsidiary and Debt Waiver

TOKYO --(Business Wire)--

Renesas Electronics Corporation (TSE: 6723, "Renesas Electronics"), a premier provider of advanced semiconductor solutions, today announced that, under the approval of Renesas Electronics' Board of Directors on July 28, 2014, it will consolidate its subsidiary Renesas Mobile Corporation ("Renesas Mobile") through an absorption-type merger ("Merger").

Since the Merger is an absorption-type merger of a wholly-owned subsidiary, certain disclosure items and details have been omitted.

1. Purpose of Merger

Renesas Mobile was established in 2010 as a wholly-owned subsidiary of Renesas Electronics that is principally engaged in the design of system-on-chip (SoC) devices for use in mobile phones and car information systems (CIS). However, as announced on March 12, 2013, Renesas Electronics has been considering a variety of structural reform measures for the mobile business of Renesas Mobile, and has implemented measures to withdraw from the 4G wireless business.

As an important initiative among the structural reform measures currently being undertaken by the company, Renesas Electronics has decided to execute an absorption-type merger with Renesas Mobile with an aim of expanding its CIS business in the automotive field, by concentrating resources involved in that business within Renesas Electronics and to improve the company's ability to develop solutions, while boosting the operational efficiency of that business and strengthening the profit structure.

2. Summary of Merger

(1) Schedule of Merger

- Approval of Board of Directors regarding debt waiver to consolidated subsidiary: July 28, 2014

- Approval of Board of Directors regarding the Merger: July 28, 2014

- Conclusion of merger agreement: July 28, 2014

- Date of Merger (effective date): October 1, 2014 (planned)

(Note) Renesas Electronics will follow the procedure for a simple absorption-type merger as stipulated under Article 796, §3 of the Japan Corporation Law, and Renesas Mobile will follow the procedure for a short-form absorption-type merger as stipulated in Article 784, §1 of the Japan Corporation Law, both of which do not require approval of the merger agreement by a general meeting of shareholders.

(2) Method of Merger

The Merger will be conducted through an absorption-type merger method in which Renesas Electronics will be the surviving company and Renesas Mobile will be dissolved as the absorbed company.

Since Renesas Mobile presently has liabilities exceeding its assets, Renesas Electronics plans to waive the debts owed by Renesas Mobile in advance of the merger, thereby eliminating its state of insolvency before the merger takes place.

- Debts to be waived: Loans and other accounts receivable

- Total value of debts to be waived: 38.9 billion yen (estimate)

- Implementation date: September 30, 2014 (planned)

(3) Distribution of Assets

Since Renesas Mobile is a wholly-owned subsidiary of Renesas Electronics, there will be no stocks, money, etc. issued in connection with the Merger

(4) Share subscription rights and bonds with share subscription rights

No share subscription rights or bonds with share subscription rights are issued.

2. Overview of parties to the Merger (as of March 31, 2014)




Company Name   Renesas Electronics Corporation (surviving company)   Renesas Mobile Corporation (absorbed company)
(1) Address   1753 Shimonumabe, Nakahara-ku, Kawasaki, Kanagawa   Nippon Building, 2-6-2, Ote-machi, Chiyoda-ku, Tokyo
(2) Representative   Hisao Sakuta, Representative Director, Chairman and CEO   Hideaki Chaki, CEO
(3) Major Operations   Research, development, design, manufacture, sale, and servicing of semiconductor products   Design of SoC devices, etc., for use primarily in mobile phones and car information systems
(4) Capital   228,255 million yen   5,000 million yen
(5) Established   November 1, 2002 (started operation on April 1, 2010)   September 1, 2010 (started operation on December 1, 2010)
(6) Major Stockholders and Ownership Ratios   Innovation Network Corporation of Japan: 69.15%

Japan Trustee Services Bank, Ltd. (Re-trust of Sumitomo Mitsui Trust Bank, Limited / NEC Corporation pension and severance payments Trust Account): 8.11%

Hitachi (News - Alert), Ltd.: 7.66%

Mitsubishi Electric Corporation: 6.26%

  Renesas Electronics Corporation: 100%
(7) Shares Issued   1,667,124,490   100,000
(8) Fiscal Term   March 31   March 31
(9) Consolidated Net Assets   227,314 million yen   -40,915 million yen
(10) Consolidated Net Assets per Share   128.73 yen   -409,151.60 yen
(11) Consolidated Total Assets   786,002 million yen   7,377 million yen
(12) Consolidated Net Sales   833,011 million yen   45,779 million yen
(13) Consolidated Operating Income (Loss)   67,635 million yen   -4,250 million yen
(14) Consolidated Ordinary Income (Loss)   58,625 million yen   -5,699 million yen
(15) Consolidated Net Income (Loss)   -5,291 million yen   -4,282 million yen
(16) Consolidated Net Income (Loss) per Share   -5.07 yen   -42,818.43 yen

Note: Figures for Renesas Mobile listed above are not consolidated results as Renesas Mobile does not prepare its own consolidated financial statement.

3. Situation Following the Merger

There will be no changes to the company name, business activities, headquarters address, representative, capital, and end of fiscal year of Renesas Electronics as a result of the merger.

4. Future Outlook

No major impact is anticipated on Renesas Electronics' consolidated and non-consolidated financial results for the fiscal year ending March 31, 2015 as a result of the Merger

About Renesas Electronics Corporation

Renesas Electronics Corporation (TSE: 6723), the world's number one supplier of microcontrollers, is a premier supplier of advanced semiconductor solutions including microcontrollers, SoC solutions and a broad range of analog and power devices. Business operations began as Renesas Electronics in April 2010 through the integration of NEC (News - Alert) Electronics Corporation (TSE:6723) and Renesas Technology Corp., with operations spanning research, development, design and manufacturing for a wide range of applications. Headquartered in Japan, Renesas Electronics has subsidiaries in 20 countries worldwide. More information can be found at www.renesas.com.


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