US-based wireless technology provider Qualcomm confirmed today that it has agreed to buy US chipmaker Atheros Communications.
Qualcomm will pay US$45 a share for Atheros, yielding an enterprise value of US$3.1bn.
This represents a 22% premium on Atheros…
US-based wireless technology provider Qualcomm confirmed today that it has agreed to buy US chipmaker Atheros Communications.
Qualcomm will pay US$45 a share for Atheros, yielding an enterprise value of US$3.1bn.
This represents a 22% premium on Atheros share price (US$37 a share) that was being traded on the Nasdaq yesterday afternoon before the news broke. The Atheros share price subsequently rose to $44 at closing.
The transaction is expected to be completed in the first half of 2011.
In a statement, Qualcomm said that the acquisition is intended to accelerate the expansion of its technologies and platforms to new businesses, thereby providing new growth opportunities.
The move is being widely seen as a means for Qualcomm to expand its business into providing chips for smartphones and tablets.
Qualcomm’s chairman and CEO, Paul Jacobs, said: “It is Qualcomm’s strategy to continually integrate additional technologies into mobile devices to make them the primary way that people communicate, compute and access content. This acquisition is a natural extension of that strategy into other types of devices.”
Based in San Jose, California, Atheros produces wired and wireless technology (particularly semiconductors) for the computing, networking and consumer electronics industries.
Its 3Q results, announced in October 2010, showed record revenue of US$238.2m, up 58% on the same period in 2009.
Atheros’s president and CEO, Craig Barratt, is expected to join Qualcomm as president of Qualcomm Networking & Connectivity.
Qualcomm has been divesting non-core assets from its business in recent months. In December, it agreed to sell licences in the 700MHz spectrum band to AT&T. The transaction is expected to be completed in the second half of 2011.
Qualcomm’s mobile TV service Flo TV will close in March. It is also looking to leave its broadband JV with Tulip Telecom in India.
