Today, passive electronic component manufacturer Yageo announced that it has reached a definitive agreement with KEMET and will acquire KEMET for $1.8 billion in cash.

The board of directors of the two companies has approved the deal, and Yageo said the deal is expected to be completed in the second half of 2020 and KEMET will become a subsidiary of Yageo. According to Yageo, the combined total annual revenue will reach approximately $3 billion after the merger.

Yageo said that there are five main purposes for acquiring KEMET. The first is to increase the product mix and expand the service to provide customers with one-time purchase of electronic components; the second is to expand the company's business scale and market in the US and Europe; the third is to make full use of KEMET's merger and acquisition of TOKIN, so that Yageo can smoothly enter the Japanese market; the fourth is to continue to strengthen the company's complete layout in the automotive, industrial and 5G niche market; the fifth is to further expand the scale of KEMET's operations through Yageo's deep-rooted layout and sales channels in Greater China and Southeast Asia.

Pierre Chen, chairman and CEO of Yageo, said the acquisition would enhance Yageo's ability to serve customers in consumer electronics and high-end automotive, industrial, aerospace, telecommunications and medical sectors.