Japan Investment Corp (JIC), a government-backed fund, has agreed to buy leading semiconductor materials maker JSR Corp for about 909.3 billion yen ($6.4 billion).
JIC plans to launch a tender offer in late December offering 4,350 yen per share, a 35 percent premium to Friday’s closing price, to take JSR private. Mizuho Bank and the government-backed Development Bank of Japan (DBJ) will provide financing.
“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.
JSR is a top supplier of photoresists, which are light-sensitive chemicals used to etch patterns on wafers.
“Japan has a monopoly, with China and others yet to develop this technology,” said Kazuhiro Sugiyama, consulting director at research firm Omdia.
JIC said last November it had expanded the size of its buyout fund by 4.5 times to 900 billion yen, Reuters news report said.
JSR, which was set up in 1957 as a government-backed producer of synthetic rubber, reported a 20 percent jump in sales to 408.9 billion yen in the year ended March, while operating profit declined 33 percent to 29.4 billion yen.
JSR and Shin-Etsu have market shares of 39 percent and 37 percent, respectively, in the ArF photoresist market, according to Nomura Securities.
JSR’s clients include Samsung Electronics, Taiwan Semiconductor Manufacturing (TSMC) and Micron Technology.
In the advanced extreme ultraviolet (EUV) photoresist market, Tokyo Ohka Kogyo is adding share from top clients in South Korea and Taiwan, Nomura said.
Activist investor ValueAct Capital, which said it supports the deal, is a major shareholder in JSR and has an executive on the board.