KKR considers £800m Renesas stake in second Japanese foray

City A.M. Reporter
PRIVATE equity firm KKR is in talks to invest about 100bn yen (£800m) for control of Japan's Renesas Electronics, sources said yesterday.

The deal would give KKR more than 50 per cent of cash-strapped Renesas, and could speed the pace of its current restructuring as it fights for survival in the face of sinking prices and aggressive overseas rivals.

News of the plan pushed Renesas' battered shares to a seven-week high, but the stock is still trading at around half its levels of six months ago.

A deal with KKR would be the firm's largest investment in Japan, and would be among the top ten biggest private equity investments in the world's third largest economy.

Under the proposal, New York-based KKR would buy new shares of Renesas, the world's fifth-largest chipmaker, through a private placement, sources familiar with the deal said.

Executives from KKR traveled to Tokyo this week to present the plan to Renesas’ main banks and its three major shareholders, NEC, Hitachi and Mitsubishi Electric.