Mitsui Chemicals and DBJ Agree to Buy Chip Materials Maker JSR for ¥1.84 Trillion

The pair will buy all of JSR's shares from funds managed by JIC Capital, part of state-backed Japan Investment Corp, which took JSR private in 2024. JSR and four affiliated companies would become consolidated subsidiaries of Mitsui Chemicals. The deal still needs competition and foreign-investment approvals.

The acquisition is the largest yet in Japan's effort to consolidate the chemicals and materials companies on which the global chip industry depends. Japanese suppliers dominate photoresists, and demand for leading-edge chips for AI data centres has made those materials more valuable. Mitsui Chemicals said the combination would make it Japan's largest semiconductor materials maker by sales.

How the Deal Is Funded

The price is large relative to the buyer. Mitsui Chemicals had a market value of about ¥642.7 billion, according to TipRanks data, meaning it is paying close to three times its own worth.

Mitsui will pay in cash, Reuters reported, drawing on ¥1.64 trillion of bridge loans from its main banks and a ¥200 billion equity investment from DBJ's venture capital arm. The company will also issue new shares under a shelf registration, which Reuters put at up to ¥150 billion. Mitsui warned that its ratio of debt to core earnings would temporarily rise above 4.0 after the deal closes, and said it plans to refinance the bridge loans within a year to protect its credit rating.

The company is targeting about ¥40 billion a year in additional profit by 2035 from the combination. It said JSR's semiconductor materials operations would sit at the centre of its ICT Solutions strategy, and that putting the two companies' customers, products and research together would support materials development, global supply and more focused investment.

The Price Has Risen

Alongside the deal, Mitsui revised the range of businesses it is considering separating, which covers its Basic and Green Materials unit, so that its specialty growth businesses sit apart from commodity chemicals.

The final price is well above what was discussed a week ago. The Japan Times reported on November 5 that Mitsui was eyeing a bid of more than ¥1 trillion, and other reports put the figure above ¥1.3 trillion. Mitsui Chemicals shares fell sharply on Friday after Reuters identified the company as the winning bidder.

JIC took JSR private in a deal valued at about ¥900 billion, removing it from the stock market so it could reorganise the business without pressure from public shareholders. The sale to Mitsui would give the state fund a large return within about two years, while DBJ's stake keeps a government-linked investor in one of Japan's most strategically important chip suppliers.

Dollar figures differ slightly between reports. Bloomberg converted the price to $12 billion, while Reuters gave $11.6 billion at an exchange rate of 158.45 yen to the dollar. Mitsui has not said when it expects the deal to close.