NEC Electronics, Renesas merger agreement delayed

TOKYO (Reuters) - Japanese chipmakers NEC Electronics Corp (6723.T) and Renesas Technology Corp said on Tuesday they will delay the signing of a merger agreement by a month until the end of August as due diligence was taking longer than expected.

A deal between unlisted Renesas, the world's sixth-biggest chipmaker, and NEC Electronics, the world's 11th-largest, would create the world's third-largest semiconductor maker after Intel Corp (INTC.O) and Samsung Electronics Co (005930.KS).

The two loss-making chipmakers said they still plan to unite operations in April -- a move widely seen as necessary for survival although analysts have said that their differing technologies will limit cost-reduction measures.

Due diligence on global production bases and their sales networks is taking longer than expected, the two firms and their shareholders NEC Corp (6701.T), Hitachi Ltd (6501.T) and Mitsubishi Electric (6503.T) said in a statement.

Years of losses have weakened the capital bases of NEC Electronics and Renesas. Hitachi, which owns just over half of Renesas, has said that the merged entity might apply for public funds to shore up its finances.

NEC Electronics parent NEC is also eyeing a $2.1 billion capital raising, according to a source.

Shares of NEC fell 3 percent, while shares of NEC Electronics, Hitachi and Mitsubishi Electric were little changed in a flat market.

(Reporting by Mayumi Negishi and Yumiko Nishitani; Editing by Edwina Gibbs)