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© Reuters. FILE PHOTO: Renesas Electronics Corp's logo is seen on its product at the company's conference in Tokyo© Reuters. FILE PHOTO: Renesas Electronics Corp’s logo is seen on its product at the company’s conference in Tokyo

TOKYO (Reuters) – Japanese auto parts supplier Denso Corp (T:) is buying an additional 4.5 percent stake in chipmaker Renesas Electronics (T:) in a deal worth $800 million based on market prices, as car makers accelerate the adoption of self-driving and other technologies.

Denso is an affiliate of and supplier to Japan’s biggest automaker Toyota Motor Corp (T:). It has been ramping up spending on research and development of new technologies including “connected cars”. In February, Denso announced an investment in California cybersecurity startup Dellfer.

It is acquiring the stake from Innovation Network Corp of Japan (INCJ), a state-backed fund that owns 50.1 percent in the chipmaker, INCJ said in a statement. The terms of the deal were not disclosed, but the transaction is worth about 85 billion yen ($796.9 million) based on Renesas’ share price.

As a result of the deal, Denso’s stake in Renesas will rise to 5 percent, while INCJ’s will fall to 45.6.

Renesas shares rose almost 9 percent on Friday after the news, before giving back some of the gains to be up 5 percent. Denso shares were down 0.1 percent. The benchmark Nikkei 225 index () was up 0.2 percent in afternoon trade.

Automakers and auto parts makers have been racing to develop new technologies as the sector shifts to electronic cars and automated driving, boosting the role of chips and software in cars.

In a statement, Denso said it is “essential to further enhance collaboration with semiconductor manufacturers that have profound experience and expertise” to develop vehicle control systems in automated driving and other new fields.

Last week, Toyota said it would establish a new venture with Denso and another group supplier Aisin Seiki Co (T:), which would invest more than $2.8 billion to develop automated-driving software.

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