CG Power set to buy Renesas' Radio Frequency division in $36 Mn deal

CG Power and Industrial Solutions has entered into an agreement to buy the Radio Frequency (RF) components business of Japan-based Renesas Electronics Corporation for a cash consideration of $36 million. According to PTI quoting a BSE filing, an asset purchase agreement was executed on October 4 this year between CG and Renesas Electronics America Inc, a subsidiary of Renesas, and other affiliated entities of Renesas, that have assets in the RF components business.

CG Power, a Murugappa Group firm, will acquire Intellectual Property (IP), tangible assets and select transferring employees across various functions such as semiconductor design, marketing, applications, etc. related to the RF components business of Renesas. The proposed acquisition, as per reports, will enable the company to enter the semiconductor design business.

CG Power has reportedly established a subsidiary, CG Semi Private Limited for Outsourced Semiconductor Assembly and Test (OSAT) business. CG and Renesas Electronics America Inc are joint venture partners in CG Semi Private Limited. The said business, PTI states, will be acquired by entities that will be established by CG, post completion of customary conditions and applicable regulatory approvals. Subject to necessary approvals, the acquisition is expected to be completed in about 6 months.

Vellayan Subbiah, Chairman of CG Power and Industrial Solutions, said, “A significant number of semiconductor designers globally are Indians. Through this acquisition, we aim to enhance India’s presence in the semiconductor design & development space, considered to be a high-growth and high-profitability sector.”

This agreement will provide the opportunity for Renesas' RF team to expand, believes Davin Lee, Senior Vice President and General Manager of the Analog and Connectivity Group at Renesas, as he said, “CG will deliver outstanding RF technology and world-class support to our customers, and we will support a smooth transition to facilitate the same. For Renesas, this move sharpens our focus on the strategic segment of our analog and connectivity business, enabling us to further scale to better serve customer demand.”

The ₹77,881 crore Murugappa Group is a 124-year-old conglomerate with presence across India and the world. It has diverse businesses in agriculture, engineering, financial services and more. The group has 9 listed companies including Carborundum Universal Limited, CG Power & Industrial Solutions Limited, and Cholamandalam Financial Holdings Limited, to name a few.