InvenSense Shares Rise After TDK's Deal to Buy It

Shares of chip maker InvenSense Inc. jumped Wednesday after Japanese electronics parts maker TDK Corp. said it had agreed to buy the company for $1.3 billion in the latest deal in the semiconductor space.

TDK will pay $13 a share for InvenSense, a 19.9% premium on the San Jose, Calif.-based firm’s closing share price Tuesday. Shares of InvenSense were up 18% to $12.75 in early afternoon trading in New York. TDK shares fell 0.8% in Tokyo trading.

Chip makers have been cutting deals and consolidating in recent years as technology and the market shift.

InvenSense says it focuses on devices for mobile, automotive, gaming, industrial, drone, wearables, smart home and other uses in the so-called Internet of Things, many of which have seen rapid growth in recent years. Apple is its biggest customer, accounting for 40% of its $418 million in revenue in the fiscal year that ended in April, according to company filings. Samsung was second with 16%.

For example, chip makers have turned to car technology as the market for chips in smartphones slows. The average new car has 616 chips in it compared with 550 in 2013, the research IHS Markit estimates.

TDK said the deal will add to its product lineups and help it become a stronger player in the Internet of Things, as well as in the automotive, information and communications technology.

The deal, approved by the boards of both companies, is subject to regulatory approval and is expected to close in the second quarter of the fiscal year ending March 2018.

Write to Austen Hufford at [email protected]