Renesas Ends Acquisition of Sequans Semiconductor

Renesas Electronics, a prominent player in the semiconductor industry, has officially announced the cancellation of its intended acquisition of Sequans Communications, a leading French semiconductor company. This decision has resulted in the termination of the Tender Offer (TOB) for Sequans shares, causing a significant drop in Sequans' stock price by nearly 65% on February 23, reaching a historic low of $0.90, the lowest since its listing in April 2011.

The cancellation by Renesas Electronics is attributed to unforeseen tax implications associated with the Sequans acquisition. As per the terms outlined in the Memorandum of Understanding (MOU), Renesas Electronics and Sequans had the right to terminate the agreement if the Tokyo Regional Tax Bureau confirmed that the proposed restructuring would trigger taxable income recognition under Japanese tax law ("Adverse Japanese Tax Ruling") and necessitate the payment of related taxes. On February 15, 2024, Renesas received an unfavorable Japanese tax ruling, prompting the exercise of its right to terminate the MOU and subsequently ending the tender offer.

In August 2023, Renesas had initially announced a basic agreement with Sequans to acquire all issued common shares through a TOB at a price of $0.7575 per common share and $3.03 per American Depositary Share (ADS) (1 ADS equivalent to 4 common shares). Renesas had commenced the TOB implementation in September 2023, with a projected acquisition value of approximately $249 million.

With the termination of the TOB, Renesas assures that Sequans common shares and ADS previously offered for sale will be promptly returned. Renesas Electronics emphasizes that this contract termination will not significantly impact its core strategy of advancing technology in high-growth industries. Renesas remains committed to exploring significant opportunities in cellular Internet of Things (IoT) technology and intends to strengthen its momentum through continued collaboration with Sequans.

Established in 2003, Sequans specializes in designing and developing chips and modules for Internet of Things (IoT) devices. The company offers a wide range of 5G/4G cellular IoT products, including 5G NR, Cat 4, Cat 1, and LTE-M/NB-IoT, providing reliable wireless connections for IoT without the need for gateways.