Taiwan’s Yageo (2327.TW) said it will implement strict controls to prevent technology from leaking if it succeeds in acquiring Japan’s Shibaura Electronics (6957.T), responding to concerns in Japan over what the deal could mean for national security.
Chairman Pierre Chen told reporters in Taipei on Saturday that the company will meet with Shibaura in mid-June in Tokyo to discuss potential cooperation.
Yageo, the world’s largest maker of chip resistors, launched an unsolicited tender offer for Shibaura in February, seeking full control of the Japanese firm, which specialises in thermistor technology.
Yageo offered to buy Shibaura at 4,300 yen per share, valuing the company at more than 65 billion yen ($450 million).
Spurning Yageo's overture, Shibaura tapped Japanese components supplier Minebea Mitsumi (6479.T) as a white knight. Minebea and Yageo entered a bidding war, with the latter now offering 6,200 yen. The stock closed at 6,100 yen on Friday.
"Our strategy is to inject resources and strengthen R&D for advanced technologies. We're also preparing to make larger investments to expand their facilities in Japan," Chen said.
Asked about Japan's national security concerns, he said: "We will implement strict controls to ensure technology does not leak."
Unsolicited takeovers were once rare in Japan, where companies often mounted elaborate defences. The Japanese industry ministry's M&A guidelines in 2023 cracked down on what it considered excessive defence tactics, de-stigmatising unsolicited buyouts and leading some of such deals to succeed.
Chen said that negotiations with Japan's Ministry of Economy, Trade and Industry had been going smoothly.
He said that if Yageo acquires Shibaura, the deal would address a gap in its portfolio of thermistors, making Yageo’s offerings more complete for global customers and helping Shibaura expand its access to markets outside of Japan.
Yageo said it aims to ease the burden of managing smaller component suppliers for its major clients, including Apple and Nvidia, by offering more comprehensive product portfolios and solutions.
Yageo is also the world's number three manufacturers of multilayer ceramic capacitors and provides key components used in Apple’s (AAPL.O) iPhones, Nvidia’s (NVDA.O) AI servers, and Tesla's (TSLA.O) electric vehicles.
($1 = 144.8500 yen)
