Qualcomm to buy Atheros for around $3.2 billion
Baku, January 7 (AZERTAC). Qualcomm Inc (QCOM.O) plans to buy Atheros Communications Inc (ATHR.O) for roughly $3.2 billion in cash, showing its determination to become a major player in supplying chips for smartphones and tablet computers.
Qualcomm is clearly betting the deal -- at a 21.6 premium to Atheros` share price before talk of the takeover began to circulate this week -- will beef up its position in mobile devices, a market expected to explode in 2011 with new tablet computer offerings to compete against Apple`s (AAPL.O) iPad.
Qualcomm is already a major player in making microchips that handle data crunching and voice communication in phones. But until now, it has made less progress on its own in developing chips tablet PCs that incorporate advanced networking functions.
With Atheros, it is buying a key producer of chips used in WiFi, bluetooth and ethernet networking, along with GPS systems. Its chips appear in a suite of electronics devices, including networking equipment, personal computers, mobile telephones, mobile gaming devices, televisions and printers.
The company`s two biggest customers are Hon Hai Precision Industry Co. (2317.TW) and Nintendo Co. (7974.OS), according to its most-recent annual report. Others include Apple Inc (AAPL.O), Dell Inc (DELL.O), Hewlett-Packard Co. (HPQ.N) and Microsoft Corp. (MSFT.O).
Qualcomm said on Wednesday it will pay $45 per share for Atheros. The New York Times reported the potential acquisition on Tuesday, sending Atheros shares up 18.9 percent to $44 on the Nasdaq. In early trading, Atheros shares rose 58 cents to $44.58, and Qualcomm shares rose 51 cents to $51.48.
Based on 71.6 million outstanding Atheros shares as of Oct. 20, the acquisition is worth $3.2 billion. Qualcomm said the "enterprise value" of the transaction is $3.1 billion.
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