Japan's JSR says it is considering being bought by state-backed JIC

[June 24, 2023]  (Reuters) -Japanese semiconductor-equipment maker JSR Corp said on Saturday it is considering a deal for it to be bought by state-backed Japan Investment Corp (JIC), a move that would have major implications for Japan's semiconductor strategy. 

JSR said nothing was decided but that its board would discuss the matter on Monday, after the Nikkei business daily reported JIC was in talks to buy JSR for about 1 trillion yen ($7 billion).

The fund aims to make a tender offer as early as this year after clearing the buyout with domestic and foreign antitrust authorities, the newspaper said. It did not cite a source for its information.

Japan's government regards microchips as strategic products to strengthen its economic security, and seeks to bolster supply chain.

JIC and a spokesperson for Japan's Ministry of Economy, Trade and Industry, which oversees JIC, declined to comment.

If the deal goes through, JSR would delist from the Tokyo Stock Exchange as soon as 2024, according to Nikkei.

JSR, set up in 1957 as a government-backed synthetic rubber maker, now supplies photoresists to global chipmakers. They are used to transfer circuit patterns onto semiconductor wafers.

Activist investor ValueAct Capital held a 9.25% stake in JSR according to its latest filing in May 2021, and has an executive on the board. Ownership changes of more than 1% of a company's shares require fresh filings.

To purchase JSR, JIC intends to establish a new company with 500 billion yen ($3.5 billion) in capital, while Mizuho Bank, a part of Mizuho Financial Group, will provide 400 billion yen in financing, Nikkei said. Mizuho Bank declined to comment.

The fund plans to raise 100 billion yen via preferred shares and subordinated loans underwritten by various banks, the newspaper said.

The deal would grant JSR, with its 30% share of the global photoresist market, greater freedom for expansion, without being constrained by worries about stock market performance, Nikkei said.

Japan's industry ministry said in April it aimed to triple sales of semiconductors made in Japan to 15 trillion yen by 2030.

($1 = 143.7800 yen)

(Reporting by Riya Sharma in Bengaluru and Miho Uranaka, Ritsuko Shimizu and Makiko Yamazaki in Tokyo; Writing by Satoshi Sugiyama; Editing by Arun Koyyur and William Mallard)

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