In Short:
CG Power and Industrial Solutions has agreed to purchase the Radio Frequency (RF) components business from Japan’s Renesas Electronics for $36 million. The deal, signed on October 4, involves acquiring intellectual property, assets, and some employees. This acquisition, expected to complete in six months, aims to strengthen CG’s presence in semiconductor design and enhance India’s role in this industry.
CG Power Takes a Bold Step into the Semiconductor World
In an exciting development for the tech and industrial sectors, CG Power and Industrial Solutions announced on Saturday that they have sealed a deal to acquire the Radio Frequency (RF) components business from the renowned Japanese company, Renesas Electronics Corporation, for a hefty price tag of $36 million.
Details of the Agreement
This pivotal asset purchase agreement was officially signed on October 4, 2024, between CG Power and Renesas Electronics America Inc, the American subsidiary of Renesas, along with certain affiliated entities that hold the RF components business assets. This move was documented in a recent filing with the BSE.
What’s Included in the Acquisition?
Under the terms of the agreement, the Murugappa Group-owned CG Power plans to acquire not only the Intellectual Property (IP) and tangible assets associated with the RF components business but also select personnel across various functions including semiconductor design, marketing, and applications.
This acquisition marks a significant leap for CG Power, allowing them to dive headfirst into the semiconductor design arena. Recently, the company established a subsidiary known as CG Semi Private Limited to focus on the Outsourced Semiconductor Assembly and Test (OSAT) business. Notably, CG and Renesas Electronics America Inc are joint venture partners in CG Semi Private Limited.
- Also read: L&T subsidiary expects its chip production to begin in two years
The Road Ahead
The aforementioned business will be acquired by newly formed entities by CG, following the completion of customary conditions and necessary regulatory approvals. This transaction is anticipated to wrap up within approximately six months.
Expressing his vision, Vellayan Subbiah, Chairman of CG Power and Industrial Solutions, emphasized, “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, which is known for its high growth potential and profitability.”
Renesas’ Perspective
Davin Lee, Senior Vice President and General Manager of the Analog and Connectivity Group at Renesas, believes this agreement will bring new opportunities for Renesas’ RF team. “CG will deliver outstanding RF technology and world-class support to our customers. We will facilitate a smooth transition. For Renesas, this move sharpens our focus on the strategic segment of our analog and connectivity business, enabling us to better meet customer demands,” he explained.
About the Murugappa Group
The Murugappa Group, a storied conglomerate with over 124 years of legacy, spans a wide array of industries worldwide, including agriculture, engineering, and financial services. With a market capitalization of ₹77,881 crore, the group includes 9 listed companies such as Carborundum Universal Limited, CG Power & Industrial Solutions Limited, and Cholamandalam Investment & Finance Company Limited, among others.
- Also read: Murugappa Group reports 15% rise in PAT to ₹7,885 crore; turnover up 5% to ₹77,881 crore
