SiTime Is Said in Talks to Acquire Renesas’s Timing Division

(Bloomberg) — Analog chipmaker SiTime Corp., which specializes in chips that keep circuits in sync inside data centers, is in talks to acquire Renesas Electronics Corp.’s timing unit, according to people familiar with the matter.

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Santa Clara, California-based SiTime is discussing the terms of a potential deal for the Renesas division, which manufactures the clocks that synchronize the signals in wireless infrastructure, networking and data centers, the people said.

If a deal is struck, it could value the timing business at up to $2 billion, including debt, the people said, asking not to be identified discussing confidential information.

Negotiations between the two parties are ongoing and there’s no certainty they’ll result in an agreement, the people said. Another suitor could also emerge or terms of the deal could change, they added.

Renesas shares climbed as much as 7.2% in Tokyo on Wednesday morning, marking their biggest gain since Oct. 31 and outpacing other Japanese chip gear makers.

A representative for SiTime didn’t respond to requests for comment, while a Renesas spokesperson declined to comment. Reuters previously reported on the Japanese company’s plans to sell the unit.

While the potential deal would technically be cross-border from the US to Japan, SiTime has a Japanese backer, MegaChips Corp., that bought it in more than a decade ago and which later took it public. The Osaka-based semiconductor company still owns 13% of SiTime, according to data compiled by Bloomberg News. The Renesas deal would represent SiTime’s largest acquisition to date.

Shares of SiTime have gained 34% this year, giving the company a market value of about $7.8 billion. Renesas has slid 11%, for a market capitalization of about 3.4 trillion yen ($21.9 billion).

–With assistance from Yuki Furukawa and Alice French.

(Adds share move in fifth paragraph)

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