TOKYO -- Kaga Electronics has entered into a definitive agreement to acquire 70% of the shares in Fujitsu Electronics Inc. (FEI) from Fujitsu Semiconductor Ltd. (FSL). 

Kaga plans to also acquire the remaining 30% shares held by FSL by the end of 2021.

The transfer of 70% shares is expected to close in January , subject to approval of relevant regulatory authorities and other customary closing conditions.

Kaga noted the changing business environment in electronics, particularly the integration of suppliers including semiconductor and device manufacturers. "We believe that the competition between electronics trading companies will intensify further in the future as their policy changes concerning distribution agents, a growing trend that customers shift their assembly of finished products overseas, changes in demand and supply and also in prices in both domestic and overseas markets, and shortening product lifecycles as a result of ongoing technological innovations."

The deal will also help expand the company's EMS business by adding FEI's broad customer base, one of its competitive advantages, to the existing global network of EMS business bases, Kaga said.

The addition of FEI will boost Kaga Electronics's total net sales to about 500 billion yen ($4.48 billion) annually.

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