TDK to expand magnetic sensor biz with Micronas buy

TDK Corp. and Micronas Semiconductor Holding AG have entered into a definitive deal in which TDK will launch an all cash public tender offer for all publicly held registered shares of Micronas for about $7.56 per share. On a fully diluted equity-value basis, the transaction is valued at nearly $215.67 million. This represents a 63 per cent premium over Micronas' closing share price on December 16, 2015, the trading day immediately preceding the pre-announcement of the offer, and a 69.7 per cent premium to the volume weighted average price during the last 60 trading days prior to pre-announcement of the offer.

TDK is endeavouring to further expand earnings from its five priority businesses in the three priority markets of automobiles, industrial material and ICT.

TDK's strengths in magnetic materials technologies have been broadly applied in its product lineup. In particular, magnetic sensors leveraging magnetic thin-film technologies nurtured in hard disk drive (HDD) magnetic heads are a strategic product line. Demand for the sensors has increased substantially, especially in the fields of automobiles and industrial material among TDK's three priority markets of automobiles, industrial material and ICT. Among these, a sensor that uses a TMR element (TMR sensor), which has entered full-scale mass production this year, offers extremely high precision and is also able to be miniaturised. It has drawn widespread attention from in and outside of Japan as an optimal highly functional sensor, mainly for the automobile industry.

From TDK's perspective, the move is intended to increase sales and profitability its activities in automotive, industrial and information and communications technology. The company said it sees increasing demand for such sensors, rating Micronas as a leading manufacturer for Hall-effect sensors with major customers in the automotive industry. According to the release, Micronas has the broadest product spectrum of Hall-effect sensors as well as embedded MCUs customised to process these sensor data worldwide. The sensors are used to detect end-positions and measuring linear or angular movements in safety, body, comfort and powertrain applications in the car. According to sources close to Micronas, TDK intends to use as competence centre for such sensors. TDKs expertise in the area of magnetic materials will create synergy effects, the company said.

This acquisition will further expand TDK's sensor business by combining its magnetic sensor business, with strengths in magnetic materials, and Mironas' products, technologies and expertise, in particular in hall sensors.

The Board of Directors of Micronas has unanimously resolved to support the public tender offer by TDK and to recommend that Micronas' shareholders to accept TDK's public tender offer. The board noted that a combination with TDK has significant strategic, operational and financial advantages for Micronas.