Qualcomm and Atheros Communications have announced that they have entered into a definitive agreement whereby Qualcomm intends to acquire Atheros, a developer of technologies for wireless and wired local area connectivity in the computing, networking and consumer electronics industries. The acquisition is intended to accelerate the expansion of Qualcomm’s technologies and platforms to new businesses beyond cellular.
Qualcomm has entered into a definitive agreement to purchase Atheros for $45 per share in cash, representing an enterprise value of $3.1 billion. The transaction has been approved by the Qualcomm and Atheros boards of directors and is subject to customary closing conditions, including the receipt of domestic and foreign regulatory approvals and the approval of Atheros’ stockholders. The transaction is expected to close in the first half of 2011.
“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. The combination of Qualcomm and Atheros is intended to accelerate this opportunity by utilizing best-in-class products for communications, computing and consumer electronics to broaden existing customer relationships and expand access to new partners and distribution channels,” said Dr. Paul E. Jacobs, chairman and chief executive officer of Qualcomm.
Atheros’ current president and chief exec, Craig H. Barratt, is expected to join Qualcomm as president of Qualcomm Networking & Connectivity.
“Qualcomm and Atheros have a long history of collaboration and share a culture of technical innovation and execution excellence. The Atheros team will build upon Qualcomm’s strengths and leadership to bolster our customers’ ability to deliver innovative and differentiated products in the increasingly connected world,” said Mr. Barratt.
Excluding amortization of acquired intangibles, Qualcomm expects the acquisition to be modestly accretive to earnings per share in fiscal year 2012, the first full year of combined operations. Qualcomm intends to finalize its estimates of the transaction’s financial impact, as well as the accounting for the transaction, upon deal close.