M&As: Mitsui Chemicals to acquire semi-con firm JSR Corp. for US$11 bn

Japan’s Mitsui Chemicals says it has signed an agreement to acquire Tokyo-based JSR Corp, a developer and manufacturer of semiconductor materials including photoresists, from investment funds managed by JIC Capital Ltd. The transaction, valued at US$11.6 billion including debt, will make JSR a consolidated subsidiary of Mitsui Chemicals. The company also announced a shelf registration for new common shares and a wider scope for its planned split-off of its Basic & Green Materials (B&GM) business.

The deal Is said to marks an aggressive pivot by Mitsui Chemicals to accelerate its transformation into a global specialty materials company.

Mitsui Chemicals will buy all JSR common shares held by JIC PEFJ1 Limited Partnership and JIC PEF1 Limited Partnership, jointly with Development Bank of Japan Inc. (DBJ; Tokyo), which will invest around US$1.3 billion. The price comprises an equity value of US$8.8 billion and US$2.8 billion in interest-bearing debt and other items, with final consideration to be adjusted at closing. Mitsui Chemicals also expects to acquire JSR’s Class A and Class B preferred shares, held by Mizuho Bank, Ltd. (Tokyo) and DBJ, for cash. Those shares are slated to convert to common shares after closing, and DBJ’s common shares will be converted to non-voting preferred shares.

The company said JSR’s advanced photoresists, customer base in semiconductor and optical fields, and global reach make it a core part of its ICT Solutions domain. Mitsui Chemicals plans to combine its Pellicle products and JSR’s advanced photoresists in front-end processes, and Icros tape and thick-film resists in back-end processes. It is targeting annual incremental profit of about US$253 million) by fiscal year 2035 from growth and cost synergies.

The company first said in May 2025 that it would consider splitting off B&GM. It will now add its Mobility Solutions business to the scope, with the aim of forming a polymer science company with an integrated polymer chain spanning upstream petrochemicals and downstream functional polymers. The company also plans to become more asset-light in underperforming businesses, improve its cash conversion cycle and sell shareholdings.

Together with JSR’s ongoing review of its life sciences business (contract research and contract development and manufacturing), which JSR treats as non-core, Mitsui Chemicals expects benefits representing business value of US$2.2 billion or more.

Funding will come from a us$10.4-billion bridge loan from the company’s principal financial institutions and DBJ’s ¥200-billion investment. Net debt/EBITDA is expected to temporarily exceed 4x after closing. 

Four JSR affiliates will become specified subsidiaries of Mitsui Chemicals: Inpria Corp. (Corvallis, Ore.), KBI Biopharma, Inc. (Durham, N.C.), JSR North America Holdings, Inc. (Sunnyvale, Calif.) and JSR Life Sciences, LLC (Sunnyvale, Calif.).

JSR reported revenue of US$2.8 billion, consolidated operating profit of US$256 million and profit attributable to owners of US$375 million for the fiscal year ended March 2026.

The transaction is subject to competition-law and foreign-investment approvals in Japan and overseas. Mitsui Chemicals is aiming to close in the second half of the fiscal year ending March 2028, and expects the impact on results for the fiscal year ending March 2027 to be minor.

Last year, in a similar vein, compatriot Sumitomo Chemical Co. (Tokyo, Japan) acquired 100% of the shares of Asia Union Electronic Chemical Corporation (AUECC), a Taiwanese semiconductor process chemicals company. This enabled Sumitomo Chemical to strengthen its global footprint and establish its first manufacturing base for semiconductor process chemicals in Taiwan and a second base in the US, alongside its Texas site, further accelerating the expansion of its semiconductor process chemicals business worldwide.

The global semiconductor industry is expected to achieve sustained growth, driven by advances in IoT, the rapid proliferation of generative AI, and expanding demand for data centres. As semiconductor devices become more advanced and complex, various process chemicals used for cleaning and drying processes in semiconductor manufacturing require ultra-high purity at the ppt (parts per trillion) level and rigorous quality control.

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