Denso drops Rohm buyout after failing to win chipmaker's backing

NAGOYA, Japan, April 28 : Japanese auto parts manufacturer Denso said on Tuesday it had withdrawn its offer to buy chipmaker Rohm after failing to secure the company's support for a deal that could have been worth up to $8.3 billion. The move marks a retreat for Denso, a key supplier to Toyota, from a potential tie-up that would have expanded its control over power-management chips used in electric vehicles and data centres. "Even if we were to continue these talks any further, at this stage we could not envision a scenario that would lead to an increase in value for both sides," CEO Shinnosuke Hayashi told reporters in a briefing at the Nagoya Stock Exchange. Hayashi said Denso had weighed the impact on its mid- to long-term corporate value and its relationship with Rohm, and concluded it was better to prioritise cooperation in technology and manufacturing. Denso, the world's second-largest auto parts supplier, had already flagged on Monday that Rohm had not agreed to its proposal and was considering withdrawing the offer. It said on Tuesday it had held multiple discussions with the Kyoto-based chipmaker since approaching it about acquiring its shares, but was unable to obtain backing from Rohm's board and a special committee set up by the company. The two companies agreed in May 2025 to form a strategic semiconductor partnership focused on integrated circuits for electric vehicles. Rohm, which has strengths in energy-efficient silicon carbide power semiconductors, said last month it had begun talks with Toshiba and Mitsubishi Electric on integrating their power semiconductor businesses. LOWER FULL-YEAR OPERATING PROFIT FORECAST Denso, which generates about 56 per cent of its revenue from Toyota group companies, saw its shares fall 3.3 per cent on Tuesday, compared with a 1.0 per cent drop in the Nikkei 225. Rohm shares rose 0.6 per cent. The Rohm announcement came as Denso forecast a nearly 10 per cent drop in profit for the current financial year, citing uncertainty over the Middle East and higher investment spending. The company said it expects operating profit of 500 billion yen ($3.13 billion) in the year ending March 2027, down from 552.5 billion yen a year earlier. The outlook comes despite a strong finish to the year just ended, with Denso posting a 50 per cent jump in fourth-quarter operating profit to 176.6 billion yen as higher production volumes offset rising tariffs, parts and material costs. ($1 = 159.5100 yen)