November 28, 2012 – The Japanese rescue of Renesas Electronics partly with state-backed funding is nearing finality, with the company’s three largest shareholders approving the deal, according to multiple reports.

According to reports citing the Nikkei newspaper, the three owners have agreed to terms including selling a two-thirds stake to INCJ for ¥180B, with another 5% stake sold for ¥10B to the aforementioned group of other domestic firms including Toyota, Nissan, and Canon. They also have agreed to other terms including a 5000-person workforce reduction, with Mitsubishi Electric taking some of those. (Faced with their own attrition problems, the other two owners would pay for voluntary retirements). Bloomberg says Mitsubishi Electric wasn’t behind the Nikkei report, while NEC and Hitachi said no decisions had been made and INCJ declined to comment. Details of the plan are expected in early December, and the plan could take affect at the start of the next fiscal year (beginning in April).

In September the Innovation Network Corporation of Japan (INCJ), a state-backed investment fund, and other several private-sector firms that source Renesas chips pitched Renesas’ main shareholders (NEC, Hitachi, and Mitsubishi Electric) and creditor banks to buy out the struggling firm. They were spurred to action in response to an acquisition bid by US-based investment firm KKR, keen to ensure the health of the company which supplies microcontroller products for key domestic industries including automotive and home appliances.