Japanese chemical manufacturer Mitsui Chemicals and the state-backed Development Bank of Japan (DBJ) will acquire semiconductor materials maker JSR for 1.84 trillion yen (USD 11.61 billion), according to a regulatory filing on Monday, November 9.
The acquisition, from state-backed Japan Investment Corporation (JIC), marks the largest deal in Japan’s chemicals sector and is expected to strengthen the country’s position in the global semiconductor supply chain.
The transaction comes as Japan looks to consolidate its semiconductor materials industry and improve its competitiveness amid growing demand for advanced chips.
Mitsui Chemicals will acquire JSR from Japan Investment Corporation, which is overseen by Japan’s finance ministry. The acquisition will significantly expand Mitsui Chemicals’ semiconductor materials business and strengthen its presence in a strategically important industry.
The deal exceeds Showa Denko’s USD 4.55 billion acquisition of Hitachi Chemical in 2020, making it the largest acquisition in Japan’s chemicals sector.
Mitsui Chemicals CEO Satoshi Ichimura described the transaction as more than an expansion of its semiconductor materials business, calling it a strategic move to accelerate the transformation of the company’s portfolio.
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The Development Bank of Japan will invest 200 billion yen in the transaction. It will convert its investment into non-voting preferred shares.
Mitsui Chemicals plans to sell shares worth up to 150 billion yen to help finance the acquisition. It will also take out a 1.64 trillion yen bridge loan, partially repaid through the equity sale.
The company plans to use additional bank loans, debt issuance and mezzanine financing to strengthen its capital base and fund the purchase.
The acquisition has raised questions among investors about its financial implications and potential benefits.
Shares of Mitsui Chemicals fell 8.5% on Monday, extending their decline after Reuters reported last week that the company had emerged as the final buyer for JSR.
According to LSEG data, Mitsui Chemicals had a market capitalization of 664.6 billion yen based on Friday’s closing price.
Market participants have questioned whether the acquisition can generate sufficient synergies to justify its substantial cost and debt burden.
Mitsui Chemicals said combining the companies’ technologies, capabilities and business foundations could create new growth opportunities. The acquisition is expected to generate an additional 40 billion yen in annual profit.
JSR manufactures photoresists, light-sensitive materials used to transfer circuit patterns onto semiconductor wafers.
Mitsui Chemicals also plans to sell JSR’s life sciences unit and other non-core businesses to improve the company’s value and restore a sound financial position within three years.
Japan Investment Corporation acquired JSR for 900 billion yen in 2024, intending to support consolidation in the semiconductor materials industry. It considered seven or eight potential buyers before selecting Mitsui Chemicals.
JIC Capital CEO Shogo Ikeuchi said the priority was finding a buyer that could build a semiconductor materials platform to support Japan over the next five to 10 years.
The acquisition comes as countries seek greater control over critical semiconductor supply chains amid rising demand for advanced chips.