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Renesas to accumulate Sequans by tender supply

Renesas Electronics Company, a provider of superior semiconductor options, and Sequans Communications S.A. have introduced that two firms have entered right into a MoU memorandum of understanding. Pursuant to the phrases of the MoU, Renesas will, following session of the Sequans’ works council and beneficial advice by Sequans Board, start a young supply to accumulate all excellent extraordinary shares, together with American Depositary Shares (ADS) of Sequans for $3.03 (€2.76) per ADS (every ADS representing 4 extraordinary shares) in money. The transaction values Sequans at roughly $249 million (€226.76 million), together with web debt, and is anticipated to shut by the primary quarter of calendar 12 months 2024, topic to confirmationof tax therapy from related authorities, regulatory approvals and different customary closing situations.

Upon closing of the transaction, Renesas intends to combine Sequans’ breadth of mobile connectivity merchandise and IP into its core product lineup, together with microcontrollers, microprocessors, analog and combined sign entrance ends. The acquisition will permit Renesas to broaden its attain to the extensive space community (WAN) market house encompassing a broad vary of information charges. It can additionally improve Renesas’ already wealthy portfolio of non-public space community (PAN) and native space community (LAN) connectivity merchandise.

The marketplace for mobile IoT (web of issues) know-how offered by firms like Sequans is fueled by demand for good meters, asset monitoring programs, good properties, good cities, related automobiles, fastened wi-fi entry networks, and cell computing units. An business examine forecasts the variety of mobile IoT units will proceed to develop by greater than 10% yearly.

“We’re thrilled to take our partnership with Sequans to the following stage,” says Hidetoshi Shibata, president and CEO of Renesas. “Sequans is a pacesetter within the fast-growing mobile IoT market with extensive mobile IoT community protection. The corporate’s know-how provides Renesas a path to supply broad connectivity capabilities throughout IoT purposes to deal with the evolving buyer wants.”

“We now have been working carefully with Renesas to serve the rising market demand for enormous IoT and broadband IoT clients,” says Georges Karam, chairman and CEO of Sequans. “As many telecom operators all over the world proceed to spend money on 5G infrastructure and with the increasing deployment of IoT purposes, combining with Renesas opens up huge alternatives to usher in a brand new period of seamless connectivity and digital mobility that may rework a mess of industries.”

The acquisition of Sequans is effort by Renesas to broaden its providing of connectivity merchandise by acquisitions, together with the purchases of Dialog, Celeno and Panthronics. Renesas and Sequans have been collaborating since 2020 to ship full-scale options that mix Renesas’ embedded processors and analog front-end merchandise with Sequans’ wi-fi chipsets for enormous IoT and broadband IoT purposes.

Based in 2003, Sequans is a semiconductor firm that designs and develops chipsets and modules for web of issues (IoT) units. Providing merchandise with 5G/4G mobile classes, together with 5G NR, Cat 4, Cat 1 and LTE-M/NB-IoT, Sequans offers IoT wi-fi connectivity with out the necessity for a gateway. The corporate additionally has confirmed abilities in low-power wi-fi units, which is essential in supporting large IoT purposes working at low knowledge charges. Its licensed options are designed to work with all radio frequency regulatory specs by carriers in North America, Asia-Pacific and Europe.

Underneath the phrases of the MoU, Renesas will provoke a money tender supply of $3.03 (€2.76) per Sequans ADS, topic to sure situations. This supply represents a premium of 42.3% to Sequans’ closing value on August 4, and seven.7% premium to quantity weighted common value over the past twelve months and a 32.6% premium to the amount weighted common value over the past six months. The transaction values Sequans at roughly $249 million (€226.76 million), together with web debt of roughly $52 million (€47.36 million).

If, upon completion of the suitable works council session, Sequans’ Board recommends the tender supply to the holders of Sequans’ extraordinary shares and ADSs, Renesas will start the tender supply thereafter. The closing of the transaction is topic to the legitimate tender of Sequans shares representing no less than 90% of the excellent share capital of Sequans on a completely diluted foundation, together with Sequans shares owned by Renesas. The transaction can also be topic to affirmation of tax therapy from related authorities, and receipt of required regulatory approvals and different customary closing situations.

As well as, upon Sequans Board advice and applicable works council session on the transactions described under, Sequans will convene a basic assembly of the shareholders to vote on a collection of transactions that might end in Sequans structurally, however not operationally, redomiciling in Germany. Following the closing of tender supply and completion of such transactions, any extraordinary shares or ADSs not tendered can be transferred to Renesas beneath German squeeze-out guidelines for statutory compensation. In reference to these transactions, Sequans’ present French actions, together with property, liabilities and workers, can be first transferred to a brand new wholly-owned French subsidiary of Sequans.

The tender supply is at present anticipated to shut by the primary quarter of 2024 and the redomiciling and associated transactions are at present anticipated to shut by the fourth quarter of 2024. Assuming the completion of the tender supply, Sequans will change into a privately held firm and Sequans’ ADSs will now not be listed on any public market.

The tender supply will likely be applied in accordance with the phrases and situations of the MoU. Along with the phrases of the tender supply, the MoU incorporates customary representations, warranties and undertakings by Sequans and Renesas.

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