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KKR’s Renesas hopes dashed as company gets $1.8bn bailout

10 Dec 2012

Global private equity giant KKR’s hopes of buying struggling Japanese computer chip maker Renesas appear to be over after the company gained a JPY150bn ($1.8bn) government-led bailout.

KKR withdrew a tabled offer in mid-October amid interest from government fund the Innovation Network Corp of Japan, which has been backed in the deal by corporates including Toyota Motor Corp and Panasonic.

The move marks the second time this year private equity buyers have missed out on an ailing Japanese chipmaker.

In May a consortium comprising TPG Capital and China’s Hony Capital were beaten in the race to buy Elpida Memory after Micron Technology entered exclusive talks to buy the bankrupt Japanese chipmaker.

The US group was understood to have trumped offers from the private equity firms and a host of potential strategic buyers with its JPY200bn ($2.5bn) bid, Reuters reported.

That deal sees Micron increase its market share to 25 per cent to become the world’s second largest producer of DRAM memory chips used in personal computers after Samsung Electronics.

Heavy competition from South Korean rivals such as Samsung has hit Japanese chipmakers hard alongside slumping orders, Reuters said.

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