Key Takeaways
- • Mitsui Chemicals agreed to acquire chipmaking materials maker JSR from state-backed Japan Investment Corp (JIC) for 1.84 trillion yen (about $11.61 billion), according to Reuters, with the Development Bank of Japan investing an additional 200 billion yen.
- • The deal is more than double Showa Denki's $4.55 billion acquisition of Hitachi Chemical in 2020 and is among the largest transactions in the sector.
- • Mitsui Chemicals will fund the purchase through a share sale of up to 150 billion yen, a 1.64 trillion yen bridge loan, bank loans, debt issuance and mezzanine financing.
- • Against a market capitalisation of 664.6 billion yen (per LSEG), the funding requirement has drawn investor concern, and Mitsui Chemicals shares fell about 13% on Monday to roughly 1,500 yen.
- • Mitsui Chemicals plans to sell JSR's life sciences unit and other non-core businesses and targets a return to a sound financial position within three years, with an aim of 40 billion yen in additional annual profit from the deal.
Summary
Mitsui Chemicals said on Monday that it will acquire chipmaking materials maker JSR from Japan Investment Corp, a state-backed fund overseen by Japan's finance ministry, for 1.84 trillion yen, or about $11.61 billion, according to Reuters. The Development Bank of Japan will also invest 200 billion yen in the transaction. Reuters described the deal as among the largest in the sector and said it could reshape Japan's chip supply chain as the government works to boost the country's competitiveness in semiconductors. The price is more than double the $4.55 billion acquisition of Hitachi Chemical by Showa Denki in 2020.
According to the filing cited by Reuters, Mitsui Chemicals will sell shares worth up to 150 billion yen to help finance the purchase and has taken out a bridge loan of 1.64 trillion yen, which is to be partially repaid through the equity raise. The company also plans to draw on bank loans, issue debt and use mezzanine financing to strengthen its capital base. Market participants have raised concerns about the scale of funding required relative to Mitsui Chemicals' market capitalisation of 664.6 billion yen, based on LSEG data and the latest closing share price.
Mitsui Chemicals shares were trading down around 13% at about 1,500 yen each on Monday, following a decline of more than 10% the previous week after Reuters first reported that it was the final buyer for JSR. When JIC bought JSR in 2024 for 900 billion yen, it said it intended to use the business to promote consolidation in the semiconductor materials sector.
Mitsui Chemicals plans to sell JSR's life sciences unit and other non-core businesses to improve the company's value and aims to regain a sound financial position within three years, the company said. JSR makes photoresists, which are used to transfer circuit patterns onto semiconductor wafers. Mitsui Chemicals is expanding its chip materials business and expects the acquisition to add 40 billion yen in annual profit. At the time of reporting, $1 equaled 158.45 yen.
According to the filing cited by Reuters, Mitsui Chemicals will sell shares worth up to 150 billion yen to help finance the purchase and has taken out a bridge loan of 1.64 trillion yen, which is to be partially repaid through the equity raise. The company also plans to draw on bank loans, issue debt and use mezzanine financing to strengthen its capital base. Market participants have raised concerns about the scale of funding required relative to Mitsui Chemicals' market capitalisation of 664.6 billion yen, based on LSEG data and the latest closing share price.
Mitsui Chemicals shares were trading down around 13% at about 1,500 yen each on Monday, following a decline of more than 10% the previous week after Reuters first reported that it was the final buyer for JSR. When JIC bought JSR in 2024 for 900 billion yen, it said it intended to use the business to promote consolidation in the semiconductor materials sector.
Mitsui Chemicals plans to sell JSR's life sciences unit and other non-core businesses to improve the company's value and aims to regain a sound financial position within three years, the company said. JSR makes photoresists, which are used to transfer circuit patterns onto semiconductor wafers. Mitsui Chemicals is expanding its chip materials business and expects the acquisition to add 40 billion yen in annual profit. At the time of reporting, $1 equaled 158.45 yen.
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