Mitsui Chemicals and DBJ will acquire all shares of JSR from government-backed Japan Investment Corp, the companies said in a filing Monday. DBJ will pay ¥200 billion in cash for a stake that will be converted to preferred shares without voting rights, it said.

The deal for JSR, one of the world’s leading makers of photoresists needed to make advanced chips, would further a government-backed effort to consolidate Japan’s fragmented semiconductor-materials industry. Japan is home to the world’s largest suppliers of silicon wafers and dominates several other critical chip materials, but many of its smaller suppliers remain vulnerable to foreign takeovers. 

Mitsui Chemicals’ shares extended their decline to as much as 15% in Tokyo.

JIC took JSR private two years ago. JSR supplies light-sensitive materials used with ASML Holding NV’s extreme ultraviolet lithography machines to pattern fine circuits onto silicon wafers. Customers for JSR’s array of specialty chemicals include Taiwan Semiconductor Manufacturing Co, Intel Corp and Samsung Electronics Co, according to data compiled by Bloomberg.

Bloomberg News reported in September that JSR was weighing buyout proposals from Mitsui Chemicals and rival Mitsubishi Chemical Group Corp.

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