Mitsui Chemicals to buy JSR for ¥1.84T, DBJ backing ¥200B

Mitsui Chemicals will acquire chipmaking materials maker JSR from Japan Investment Corp for 1.84 trillion yen, or about $11.61 billion, the company said Monday. The Development Bank of Japan is joining the deal with a 200 billion yen investment. The purchase stands to redraw Japan's chip supply chain as the government pushes to sharpen the country's competitiveness in semiconductors.

The price tag dwarfs recent sector deals, coming in at more than double Showa Denki's $4.55 billion acquisition of Hitachi Chemical in 2020. Mitsui Chemicals plans to fund it with a 1.64 trillion yen bridge loan, share sales worth up to 150 billion yen to pay part of that back, plus bank loans, debt issuance and mezzanine financing.

Investors aren't thrilled with the financing load. Mitsui Chemicals shares slid about 13% on Monday to roughly 1,500 yen each, after dropping more than 10% last week once Reuters reported the company was the final buyer. Its market capitalisation sat at 664.6 billion yen, according to LSEG.

JIC, which is overseen by Japan's finance ministry, bought JSR for 900 billion yen in 2024 and said it would use the business to drive consolidation in semiconductor materials. JSR makes the photoresists used to transfer circuit patterns onto semiconductor wafers, and Mitsui Chemicals is targeting an extra 40 billion yen in annual profit from the purchase.

To shore up its books, Mitsui Chemicals intends to sell JSR's life sciences unit and other non-core businesses, aiming to get back to a sound financial position within three years. The yen conversion used in the deal is 158.45 per dollar.