Mitsui Chemicals to buy JSR for $11.6 billion with DBJ backing

By Anton Bridge

TOKYO, Nov 9 (Reuters) - Mitsui Chemicals 4183.T said on Monday it will acquire chipmaking materials maker JSR from state-backed fund Japan Investment Corp for 1.84 trillion yen ($11.61 billion), with the Development Bank of Japan also investing.

The deal is among the largest in the sector and stands to reshape Japan's chip supply chain as the government moves to boost its competitiveness. It is more than double Showa Denki's $4.55-billion acquisition of Hitachi Chemical in 2020.

Mitsui Chemicals will sell shares worth up to 150 billion yen to help finance the transaction, the filing showed, taking out a a bridge loan of 1.64 trillion yen, to be partially paid back through the equity raise, the filing showed.

In addition, it will take out bank loans, issue debt and use mezzanine financing to shore up its capital base to fund the transaction, it said.

DBJ will invest 200 billion yen.

Shares of Mitsui Chemicals were trading down around 13% on Monday at about 1,500 yen each, following last week's fall of more than 10% after Reuters first reported that it was the final buyer for JSR.

Market participants have aired concerns about the size of funding needed. Mitsui Chemical's market capitalisation stood at 664.6 billion yen, LSEG showed, based on the latest closing share price.

When JIC, which is overseen by Japan's finance ministry, bought JSR for 900 billion in 2024, it said it planned to use the business to promote consolidation in the semiconductor materials sector.

Mitsui Chemicals plans to sell off JSR's life sciences unit and other non-core businesses to raise JSR's value, aiming to regain a sound financial position within three years, it said.

JST makes the photoresists used to transfer circuit patterns onto semiconductor wafers. Mitsui Chemicals is expanding its chip materials business and aims for additional annual profit of 40 billion yen through the JSR buy, it said.

($1=158.4500 yen)