TOKYO, Feb 15 (Reuters) - Japan's Renesas Electronics (6723.T), opens new tab on Thursday said it would buy electronics design firm Altium (ALU.AX), opens new tab for $5.9 billion in cash, as the acquisitive automotive chipmaker looks to offer digital device design to customers.
The acquisition places Renesas at the forefront of dealmaking and investment in Japan's chips industry, with the government making efforts to improve competitiveness and boost supply chain resilience against geopolitical shocks.
Renesas, which manufactures chips for automakers such as Toyota (7203.T), opens new tab and Nissan (7201.T), opens new tab, aims to provide device design through the purchase of Altium, which offers digital tools for engineers and designers devising circuit boards.
"As long as we remain a traditional device manufacturer we will only be marginalised," Renesas CEO Hidetoshi Shibata said at a news conference.
Renesas has offered A$68.50 per Altium share, 34% more than the stock's Wednesday closing price, and said it will finance the purchase with cash on hand and bank loans.
Altium is headquartered in the United States and listed in Australia. It booked sales of $263 million in the year ended June with an earnings before interest, tax, depreciation and amortisation margin of 36.5%.
"This is going to help us execute at a faster pace," Altium CEO Aram Mirkazemi told the news conference.
The deal has been approved by both companies' boards of directors but requires approval from Altium shareholders, an Australian court and regulators, Renesas said. It expects the deal to close in the second half of the year.
Renesas' share price fell as much as 4.9% after the announcement before paring losses to trade down around 1.3% at 2,568 yen in the afternoon session. Altium shares, which this year had risen 9.4% as at the last close, jumped 28% to A$65.83.
"They don't seem to be overpaying," said chief strategist Tatsunori Kawai at au Kabucom Securities.
"But the fact (market) players are not reacting positively also means they are still unconvinced about how this deal would contribute to the company's long-term growth."