Japan’s Renesas in £4bn deal to acquire UK chip designer Dialog Semiconducto

Jalal Bagherli, the chief executive of Dialog

Credit:  Jake Belcher

Reading-based Dialog Semiconductor has been snapped up by Japan’s Renesas Electronics in a €4.9bn (£4.19bn) deal, becoming the latest British technology company to succumb to Asian buyers. 

Tokyo-based semiconductor firm Renesas Electronics and Dialog confirmed the tie-up on Monday, following speculation over a takeover over the weekend.

Under the terms of the deal, Renesas is paying €67.50 per Dialog share, 20pc above the company’s close price on Friday.

Dialog, which designs chips used to manage smartphone power circuits, support bluetooth connections and illuminate displays, is listed in Frankfurt. It is based in Reading, near London. Shares in the company were up almost 17pc on Monday. 

The takeover comes after a strong year for Dialog, with sales buoyed by a surge in demand for tablets and laptops as millions shifted to remote working. 

Dialog said the deal "creates even greater growth opportunities in today’s increasingly connected world". The chip designer had previously been reliant on Apple for most of its revenues but took steps to diversify after the US giant shifted more work in-house by building up its own chip design capabilities. 

Last year, Dialog bought US firm Adesto Technologies, a company which  develops semiconductor chips designed to make smart factories,  and said the market was quickly consolidating. 

Dialog’s takeover by a Japanese company is the latest in a string of takeovers of UK semiconductor firms by overseas companies.

Arm Holdings, formerly Britain’s biggest listed tech company, was bought by SoftBank for £24bn in 2016, although the Japan conglomerate is now looking at selling it to US company Nvidia.

The following year, Imagination Technologies, another British leader in the field, was bought for £550m by private equity firm Canyon Bridge, whose largest shareholder is China Reform, a Beijing-backed group.

Jalal Bagherli, Dialog’s chief executive, has previously spoken about the company’s ties to Asia, telling the Telegraph that the company would have  no choice but to side with China against the US if a tech trade war between the two nations escalated.

 “Everything is made in China, and in Asia,” he said.