Qualcomm has agreed to buy British chipmaker CSR for £1.6bn hijacking rival Microchip Technology’s earlier bid for the firm.
Bluetooth pioneer CSR is growing in areas such as automotive and wearable devices and Qualcomm, the world's number one mobile chipmaker, has agreed to pay £9 a share in cash for CSR, representing a 56.5 per cent premium on the share price before the start of the offer period.
The British company rebuffed an approach from Microchip in August, saying the undisclosed price on offer was not enough. The two sides had been in talks over the deal however, with a deadline imposed by British regulators for today.
A specialist on connectivity, CSR (Cambridge Silicon Radio) makes chips used in products such as speaker docks and the Apple-owned Beats headphones. The acquisition is designed to boost Qualcomm’s presence in the Internet of Things (IoT) and automotive infotainment sectors, the US firm said in a statement.
Steve Mollenkopf, CEO of Qualcomm, said: “Combining CSR’s highly advanced offering of connectivity technologies with a strong track record of success in these areas will unlock new opportunities for growth. We look forward to working with the innovative CSR team globally and further strengthening our technology presence in Cambridge and the UK.”
CSR chief executive Joep van Beurden said the two companies were a good combination.
"If you look at us, we are focused on all the accessories around the phone," he told Reuters. "In voice and music, we are strong in headsets, soundbars and speaker docks; and we are strong in cars, which more and more are an extension of the phone with infotainment."
Jeffries analyst Lamb labelled the merger "a good fit", advising clients that, "clearly they (Qualcomm) have gone down the 'buy' rather than 'make' route".
Qualcomm, the dominant maker of chips used in smartphones, has been looking to expand beyond the phone market into emerging areas such as wireless home appliances and other connected devices.
In May it agreed to acquire Wilocity, a maker of wireless HDMI connections used to transmit video between computers and displays, and it developed AllJoyn, an open-source platform that allows devices to share information with other nearby devices.
The CSR deal is expected to close by the end of the summer of 2015, according to Qualcomm.