TOKYO, Sept 11 — Japanese semiconductor firm Renesas today announced a deal to buy California-based IDT in a cash deal valued at US$6.7 billion (RM27.8 billion).

Shares in Renesas spiked 5.54 per cent on the news, before dropping back slightly in the late morning.

The deal is expected to be closed in the first half of next year, following approval by IDT shareholders and the relevant regulatory authorities, Renesas said in a statement.

Renesas said it planned to finance the deal using cash reserves and bank loans.

The Japanese firm said the deal with IDT, also a semiconductor manufacturer, should "strengthen its presence in the industrial and automotive segments.”

Renesas Electronics, the world’s biggest supplier of automotive microcontroller chips, was created through a merger of the chip units of Hitachi, Mitsubishi Electric and NEC. — Reuters