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Integrated Device Technology Inc. (NASDAQ: IDTI) shares hit a multiyear high early Tuesday after it was announced that the Japanese semiconductor firm Renesas Electronics would be acquiring it.

For an idea of how significant this move is: IDT has not seen its shares this high since 2001.

Under the terms of the deal, Renesas will acquire IDT for $49 per share in an all-cash transaction representing an equity value of roughly $6.7 billion. This price represents a 29.5% premium over the unaffected price of IDT’s stock as of August 30.

The transaction is expected to be highly accretive to Renesas’s pro forma gross margin, earnings per share and free cash flow immediately after closing.

However, this transaction is still subject to closing conditions. The United States has been particular about letting its semiconductor companies sell themselves overseas, especially with China. While China and Japan are very different countries with different trading histories with the United States, there are still some concerns over whether the Committee on Foreign Investment in the United States (CFIUS) will block the deal.

The closing of the transaction is expected to occur in the first half of 2019, following approvals by IDT shareholders and the relevant regulatory authorities.

Bunsei Kure, representative director, president and chief executive of Renesas, commented:

This acquisition will bring us complementary, market-leading analog mixed-signal assets and an incredibly talented group of professionals to help us boost our embedded solution capabilities. IDT’s products combined with our MCUs, SoCs and power management ICs will enable Renesas to widen its product offerings as well as to expand its reach into areas such as the growing data economy-related space.

Shares of IDT were last seen up about 11% at $46.79, with a consensus analyst price target of $40.36 and a 52-week trading range of $25.11 to $46.92.

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