Company cites adverse tax rulings in Japan as reason…
Japan-based Renesas Electronics has cancelled its proposed $249 million acquisition of IoT module manufacturer Sequans Communications SQNS 0.00%↑. Renesas said that under the terms of the previously announced memorandum of understanding (MOU), the company could terminate the deal if it would take a big hit from the National Tax Agency of Japan.
The company said that on Feb. 15, it received an adverse tax ruling by the Japanese government, which allowed Renesas to terminate the MOU, which included the tender offer, according to a press release. “As a result of the termination of the MOU and termination of the tender offer, no ordinary shares or [American Depositary Shares] of Sequans will be purchased by Renesas in the tender offer and all ordinary shares and ADSs previously tendered but not withdrawn will be promptly returned,” according to the press release.
The deal was expected to close in the first quarter of 2024. It would have allowed Renesas to integrate Paris-based Sequans’ cellular connectivity products into its core product lineup of microcontrollers and microprocessors, the company said.
In its own press release, Sequans basically said it was moving on. “Our revenue pipeline continued to grow during the tender process,” said Georges Karam, Sequans CEO and chairman, in a statement. “Many Massive IoT design wins are shipping and product revenues are ramping compared to 2023. We continue to enjoy a strong position in key sectors such as metering, fleet management and asset tracking. Furthermore, our 5G product is currently in the sampling phase, allowing us to capitalize on the distinct strategic value of this intellectual property. This is opening up new strategic opportunities similar to those successfully pursued in the past.”
Sequans has championed IoT tracking with cellular and low-power GNSS, particularly to mitigate loss from theft. The company marketed its IoT trackers for such applications as luggage, wallets, bikes, motorcycles, automobiles, industrial pallets, fleets, farm animals and shipping containers, to name a few.
For its part, Renesas has been expanding its connectivity product offerings through strategic acquisitions that include Dialog, Celeno and Panthronics. Sequans, founded in 2003 as a WiMAX chip company, almost went under when HTC stopped ordering its radio chips in 2011.
Sequans will release its financial results for the fourth quarter and full year 2023 on Thursday, March 7, 2024.
