Taiwanese electronic components maker Yageo has completed its tender offer for Japanese peer Shibaura Electronics, marking a landmark acquisition that appears to be the first instance of a foreign company acquiring a major Japanese company through an unsolicited takeover bid.

Yageo aims to ultimately turn Shibaura into a wholly-owned subsidiary and delist it by the first quarter of 2026. The Taiwanese company announced on Monday that the tender offer had received 87.3% acceptance.

"This milestone represents a key advancement in Yageo's global strategy for the electronic components industry and reinforces our strong commitment to long-term investment in the Japanese market," Yageo said in a press release.

The acquisition, which will cost approximately 109 billion yen (US$723 million) for 100% of the shares, sparked a protracted takeover battle.

Yageo announced the unsolicited bid in February and launched the tender offer in May. The acquisition price, after several upward revisions, ultimately reached 7,130 yen per share, surpassing the 6,200 yen offered by Japanese white knight MinebeaMitsumi.

The Japanese government completed its review of the Foreign Exchange and Foreign Trade Act on September 2.

Shibaura holds the largest global market share in semiconductor temperature sensors, such as NTC thermistors. Yageo's core products are capacitors and resistors, and the acquisition of Shibaura aims to expand its product line and develop into a comprehensive electronic component manufacturer.

Chen Taiming takes action again

According to a Bloomberg report, passive component giant Yageo will bid for Japanese AI sensor manufacturer Shibaura Electronics. Not only will it outbid its rival, MinebeaMitsumi, but it will also emphasize strict control over the technology's continued presence in Japan, earning trust from the Japanese side and strengthening its presence in the AI and automotive markets.

Yageo Chairman and Founder Tai-Ming Chen emphasized that if the acquisition is successful, Shibaura's AI sensing technology will remain in Japan, and that technology controls will be strengthened to prevent leakage to countries deemed "unfriendly" by Tokyo. This addresses the Japanese government's recent concerns about foreign acquisitions of high-end technology.

Acquisition battle

In this acquisition battle, Yageo faces a "white knight" bid from MinebeaMitsumi, a precision parts supplier for Nintendo, resulting in a fraught market.

In February of this year, Yageo initially announced a public offer for 100% of Shibaura Electronics at 4,300 yen per share. This was met with a counteroffensive from MinebeaMitsumi at 4,500 yen per share. In mid-April, Yageo countered with a bid of 5,400 yen per share.

In early May, Yageo offered 6,200 yen per share (approximately NT$1,288), exceeding MinebeaMitsumi's final offer of 5,500 yen per share. The company expects to complete the acquisition of Shibaura's shares in the third quarter of this year. Yageo's public offer closes on June 19th.

Tai-Ming Chen stated that the acquisition will be a win-win situation. Yageo, which had revenue of approximately US$4 billion last year, aims to become a US$10 billion company within the next decade. One of its strategies for achieving this goal is to provide a "one-stop supply" service to meet all of its customers' passive component needs.

Currently, Yageo's product line covers nearly 90% of passive components used on printed circuit boards. Shibaura's leading technology in negative temperature coefficient (NTC) thermistors, core components for monitoring the internal temperature of electronic devices, effectively prevents overheating. This is particularly true in AI data centers, where high-performance server data processing is crucial. Shibaura perfectly fills Yageo's gap in this area.

Tai-Ming Chen stated that the strategic alliance between the two companies will generate synergistic benefits, allowing Yageo to expand its business into overseas markets such as Europe and the United States, despite its current market presence being limited to Japan.

Tai-Ming Chen stated, "We are not acquiring companies to cut costs. Rather, we aim to leverage our R&D and capital expenditures through incremental growth, expand our market, and strengthen our partners."

With the booming development of AI and electric vehicles, demand for passive components is rapidly increasing. For example, Yageo's partner NVIDIA's upcoming GB300 system will utilize 6,000 to 7,000 chip resistors in its computing module alone.

Currently, about 60% of Yageo's products are used in the industrial and automotive fields, and another 16% provide high-performance computing applications such as AI servers.

Source: Content compiled from Nikkei

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