Japanese electronics giant Renesas has acquired French IoT chip company Sequans for $249m.

Sequans Communications specialises in 5G and 4G cellular IoT chips and modules. It has entered a memorandum of understanding (MoU) with Renesas that will see it acquire all outstanding ordinary shares, valuing Sequans at approximately $249m, including net debt.

Renesas intends to integrate Sequans’ cellular connectivity products and IP into its core product line, including microcontrollers, microprocessors, analogue and mixed signal front ends. The acquisition will allow Renesas to expand its reach to the WAN market encompassing a range of data rates. It will also enhance Renesas’ portfolio of PAN and LAN connectivity products.

The market for cellular IoT technology provided by companies such as Sequans is growing rapidly, fuelled by demand for smart meters, asset tracking systems, smart homes, smart cities, connected vehicles, fixed wireless access networks and mobile computing devices. An industry study forecasts the number of cellular IoT devices will continue to grow by more than ten per cent annually.

“We are thrilled to take our partnership with Sequans to the next level,” said Hidetoshi Shibata, CEO of Renesas. “Sequans is a leader in the fast-growing cellular IoT market with wide cellular IoT network coverage. The company’s technology gives Renesas a path to offer broad connectivity capabilities across IoT applications to address the evolving customer needs.”

Georges Karam, CEO of Sequans, added: “We have been working closely with Renesas to serve the growing market demand for massive IoT and broadband IoT customers. As many telecom operators around the world continue to invest in 5G infrastructure and with the expanding deployment of IoT applications, combining with Renesas opens up vast opportunities to usher in a new era of seamless connectivity and digital mobility that can transform a multitude of industries.”

The acquisition is the latest effort by Renesas to expand its offering of connectivity products through strategic acquisitions, including the purchases of Dialog, Celeno and, most recently, Panthronics. Renesas and Sequans have been collaborating since 2020 to deliver full-scale products that combine Renesas’ embedded processors and analogue front-end products with Sequans’ wireless chipsets for massive IoT and broadband IoT applications.

Founded in 2003, Sequans is a fabless semiconductor company that designs and develops chipsets and modules for IoT devices. Offering products with extensive 5G and 4G cellular categories, including 5G NR, Cat 4, Cat 1, LTE-M and NB-IoT, Sequans provides IoT wireless connectivity without the need for a gateway. The company also has expertise in low-power wireless devices, which is crucial in supporting massive IoT applications operating at low data rates. Its certified products are designed to work with all major radio frequency regulatory specifications by carriers in North America, Asia-Pacific and Europe.

Following consultation of the Sequans’ works council and favourable recommendation by the Sequans board, the transaction is expected to close by the first quarter of 2024, subject to confirmation of tax treatment from relevant authorities, regulatory approvals and other customary closing conditions.

The acquisition would result in Sequans structurally, but not operationally, moving to Germany. Sequans’ existing French activities, including assets, liabilities and employees, would be first transferred to a new wholly-owned French subsidiary of Sequans. Sequans will become a privately held company and its shares will no longer be listed on any public market.

Founded in 2003, Sequans is based in Paris, France with additional offices in the USA, UK, Israel, Hong Kong, Singapore, Finland, Taiwan, South Korea and China.