Qualcomm Moves In To Acquire Bluetooth Tech Heavyweight CSR For $2.5 Billion
Qualcomm, a behemoth in the semiconductor business, has reportedly agreed to purchase British chip maker CSR for 1.6 billion pounds (around $2.5 billion in U.S. currency). The offer breaks down to £9 per share in cash, which represents a 56.5 percent premium on the company's share price before the start of the offer period in August, and a 27 percent premium on CSR's closing price on Tuesday.
The primary appeal here is CSR's experience in Bluetooth wireless technology. Qualcomm is a major player in the mobile market with chips that power a wide range of smartphones and tablets. As the landscape expands to include the Internet of Things (IoT) category, Qualcomm could set itself up nicely to ride the wave with an acquisition like this one, however pricey it might be.
CSR had previously been in talks with U.S. chip maker Microchip Technology. The two remained in talks after CSR turned down an undisclosed offer, though were unable to come to an agreement by the Wednesday deadline imposed by U.K. regulators.
CSR workers gathered around to perform charity work
With an offer now out in the open, it could attract other suitors to court CSR, though Qualcomm's bid is high enough that only a handful of firms are in position to make a play. As it stands, CSR's board is in unanimous favor of the deal that's on the table.
"While the CSR Directors believe that CSR is now strongly positioned to execute its strategy of delivering growth and sustainable returns in the medium and long term, we believe that the offer from Qualcomm provides CSR shareholders with an immediate and certain value which is highly attractive," CSR said in a statement. "The CSR directors believe the acquisition recognizes CSR's long term prospects and growth potential, and takes into account the dynamics of the global market and the competitive landscape in which it operates.
"The board believes this represents a very attractive outcome for CSR shareholders, customers and employees," CSR continued.
Smaller chip makers like CSR are becoming attractive targets as the market shifts to side technologies like automotive, wearables, and the like. This is especially true as smartphone growth continues to slow.
The primary appeal here is CSR's experience in Bluetooth wireless technology. Qualcomm is a major player in the mobile market with chips that power a wide range of smartphones and tablets. As the landscape expands to include the Internet of Things (IoT) category, Qualcomm could set itself up nicely to ride the wave with an acquisition like this one, however pricey it might be.
CSR had previously been in talks with U.S. chip maker Microchip Technology. The two remained in talks after CSR turned down an undisclosed offer, though were unable to come to an agreement by the Wednesday deadline imposed by U.K. regulators.
CSR workers gathered around to perform charity work
With an offer now out in the open, it could attract other suitors to court CSR, though Qualcomm's bid is high enough that only a handful of firms are in position to make a play. As it stands, CSR's board is in unanimous favor of the deal that's on the table.
"While the CSR Directors believe that CSR is now strongly positioned to execute its strategy of delivering growth and sustainable returns in the medium and long term, we believe that the offer from Qualcomm provides CSR shareholders with an immediate and certain value which is highly attractive," CSR said in a statement. "The CSR directors believe the acquisition recognizes CSR's long term prospects and growth potential, and takes into account the dynamics of the global market and the competitive landscape in which it operates.
"The board believes this represents a very attractive outcome for CSR shareholders, customers and employees," CSR continued.
Smaller chip makers like CSR are becoming attractive targets as the market shifts to side technologies like automotive, wearables, and the like. This is especially true as smartphone growth continues to slow.
