Friday, January 7, 2011

CES 2011: Qualcomm to acquire Atheros for US$3.1B

WorldWideTech & Science. Francisco De Jesús.


Mobile chip giant Qualcomm is poised to announce the acquisition of Atheros Communications, a next generation wireless chip-maker, for US$3.1 billion, in what would be its largest ever buy.


 According to a report in the New York Times, sources say that Qualcomm is offering US$45 a share for the San Jose-based firm, which would represent a premium of around 25 percent based on recent stock performance.


 It was suggested that official confirmation of the deal could be made today to coincide with the start of the Consumer Electronics Show in Las Vegas  where both firms are present.


Atheros is considered an attractive target for Qualcomm as it will allow the chip giant to move beyond its core mobile phone chip business into new areas such as tablets and other high-end connected computing devices.


 Atheros this week announced several new wireless products that bring Wi-Fi and Bluetooth technology to tablets while reducing power consumption and increasing battery life.


The New York Times notes that Qualcomm has been relatively quiet in the M&A space recently, giving it time to amass a cash pile of more than US$10 billion. This has also been achieved by selling-off many of its non-core businesses, including last month’s sale of wireless spectrum to AT&T for US $ 1.9 billion.


 It has also shut down its failed MediaFLO mobile TV business. Reports of the impending acquisition sent shares in Atheros up almost 19 percent in trading yesterday. Atheros was founded in 1998 and reported profits of US$77.6 million on US$700 million in revenue in the first three quarters of last year.

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