German Competition Authority

04/29/2021 | Press release | Distributed by Public on 04/29/2021 06:59

Semiconductor industry: Bundeskartellamt clears the proposed acquisition of Dialog Semiconductor PLC by Renesas Electronics Corporation

Date of issue:29.04.2021

The Bundeskartellamthas today cleared plans by the Japanese company Renesas Electronics Corporation to acquire all shares and sole control of Dialog Semiconductor , Reading, . Apart from numerous other semiconductor products, the pro-posed acquisition concerns in particular the supply of so-called microcontrollers to the automotive industry.

Andreas Mundt, President of the Bundeskartellamt: 'Renesas already has a strong market position in some areas for the supply of semiconductors to the automotive industry. We therefore investigated the planned merger in detail. Interviews with sev-eral automotive manufacturers and suppliers confirmed that Renesas holds a strong market position especially with regard to the supply of so-called microcontrollers. Nevertheless, there will still be sufficient alternative procurement sources for the au-tomotive sector in the future. To some degree there is demand for Dialog's products from the automotive industry. However, overlaps with Renesas' portfolio only exist in some subareas where several strong alternative suppliers continue to operate. Our investigations have thus not identified any competition concerns with regard to a possible integration of the complementary product portfolios of the two companies, particularly in view of already foreseeable technological developments in the automo-tive sector.'

Apart from some further suppliers, two of which are similarly strong competitors, Renesas is one of the leading manufacturers of microcontrollers used in the automo-tive industry. These products are used inter alia for control units of airbags, win-dow regulators or digital instrument panels.

Dialog's sales currently focus on the field of semiconductors for consumer applica-tions and communication. Dialog has, at least so far, only been marginally active in the automotive sector and mainly offers power management solutions for a number of complex semiconductors. These solutions complement the microcontrollers offered by Renesas. According to the Bundeskartellamt's investigations at automotive manu-facturers and their suppliers, the merged entity will continue to be exposed to com-petitive pressure by a sufficiently large number of effective alternative suppliers. For this reason, negative competitive impacts of the envisaged transaction, which could potentially result from technical integration or economic bundling of the two com-plementary products, could be excluded.

The cleared merger concerns plans by Rensas to acquire all of the shares in Dialog. The clearance by the Bundeskartellamtonly accounts for the anticipated effects of the merger on competition. The Bundeskartellamtis not the competent authority for assessing the project under other legal provisions such as those relating to German foreign trade law.

Press release (pdf)