TDK Corporation (“TDK”, TSE: 6762) and Micronas Semiconductor Holding AG (“Micronas”, SIX: MASN) jointly announced today that the two companies have entered into a definitive agreement pursuant to which TDK will launch an all cash public tender offer for all publicly held registered shares of Micronas for CHF 7.50 per share. On a fully diluted equity-value basis, the transaction is valued at approximately CHF 214 million. This represents a 63.0% premium over Micronas’ closing share price on December 16, 2015, the trading day immediately preceding the pre-announcement of the offer, and a 69.7% premium to the volume weighted average price during the last 60 trading days prior to pre-announcement of the offer.
TDK is endeavoring to further expand earnings from its five priority businesses in the three priority markets of automobiles, industrial material and ICT.
TDK's strengths in magnetic materials technologies have been broadly applied in its product lineup. In particular, magnetic sensors leveraging magnetic thin-film technologies nurtured in hard disk drive (HDD) magnetic heads are a strategic product line. Demand for the sensors has increased substantially, especially in the fields of automobiles and industrial material among TDK's three priority markets of automobiles, industrial material and ICT. Among these, a sensor that uses a TMR element (TMR sensor), which has entered full-scale mass production this year, offers extremely high precision and is also able to be miniaturized. It has drawn widespread attention from in and outside of Japan as an optimal highly functional sensor, mainly for the automobile industry.
Micronas is a leading supplier of hall-effect sensors for the automotive industry with more than 30 years automotive experience. Micronas today offers the world’s broadest range of hall-effect sensors and embedded motor controllers for the automotive and industrial market.
Hall-effect sensors from Micronas are used to detect end-position or to measure linear or angular movements in an extremely wide range of chassis and safety, body and comfort, and powertrain applications in the car. Micronas offers its customers innovative key solutions for their ever more demanding applications. Products from Micronas are known for quality and reliability. These core attributes, together with the commitment to functional safety, excellent logistics and safe supply are making the company a reliable partner for its customers.
This acquisition will further expand TDK’s sensor business by combining its magnetic sensor business, with strengths in magnetic materials, and Mironas’ products, technologies, and expertise, in particular in hall sensors. By fully harnessing synergies between the two companies, TDK will be able to provide a more detailed response to customers and aims to increase its competitiveness in the global market and to expand its business.
Takehiro Kamigama, President and CEO of TDK Corporation comments: “Thanks to an extensive experience in the automotive industry and considerable human talent within Micronas, we are able to significantly strengthen our magnetics technology capabilities as TDK’s core technology and we also intend to develop a new business field”.
Shigenao Ishiguro, Senior Vice President Corporate Officer and CEO of Magnetic Heads and Sensors Business Company of TDK comments: “We believe this acquisition is a perfect combination that enables complementarities from production to sales within both companies. TDK aims to be the leading company in the magnetic sensor market”.
The Board of Directors of Micronas has unanimously resolved to support the public tender offer by TDK and to recommend that Micronas' shareholders to accept TDK's public tender offer. The Board noted that a combination with TDK has significant strategic, operational and financial advantages for Micronas. Heinrich W. Kreutzer, Chairman of the Board of Directors of Micronas comments: “With the combination of TDK and Micronas we will get access to resources of TDK which will allow us to develop innovative new products combining, in particular, TDK’s MR-expertise with Micronas expertise in hall sensors. We are excited to be part of TDK and become TDK’s sensor competence center in the future.”
The pre-announcement of TDK, which has been published today, contains the main terms and conditions of the public tender offer. Among other offer conditions, the offer is subject to the approval of the competent competition authorities and subject to the condition that at least 67% of Micronas' shares are tendered. The pre-announcement and other offer documents of TDK (the "Offer Documents") will be available at http://www.global.tdk.com/news_center/press/document.htm. The transaction agreement sets forth TDK's and Micronas' rights and obligations with regard to TDK's public tender offer. A summary of the material terms and conditions of the transaction agreement will be part of TDK's offer prospectus, which is expected to be published on or about December 22, 2015 and which will be available, together with other Offer Documents as required by law at http://www.global.tdk.com/news_center/press/document.htm. The offer period is expected to commence on or about January 12, 2016 and to end on or about February 10, 2016. The transaction is expected to be completed in early March 2016. Subject to settlement and certain transitional arrangements, the members of the Board of Directors of Micronas are expected to tender their resignation.
Micronas’ earnings release for the financial year 2015 scheduled for February 25, 2016, and the 2016 annual general meeting of shareholders scheduled for March 30, 2016 are expected to be postponed until the settlement of the offer. Further details will be announced in due course.
Lazard is acting as financial advisor to Micronas, UBS is acting as financial advisor to TDK and as offer manager in the context of the public tender offer.