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Qualcomm set to acquire British chipmaker CSR for $2.5 billion

16 October 2014, 11:36 pm EDT By Menchie Mendoza Tech Times
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Qualcomm's acquisition of the Cambridge processor firm CSR and its technology will pave the way for the company to push its drive into the Internet of Things. The deal involves a wholesale acquisition of the firm and using the CSR kit in a slew of connected systems.

The deal with CSR comes as part of Qualcomm's move to take advantage of the increasing demand for everyday devices that are Internet-connected. These would include the one that has been referred to as Internet of Everything. It is a concept that pertains to connecting household devices such as refrigerators and washing machines to the Web. It also includes the wireless linking of cars and other machines which would allow them to instantly have communication exchanges.

The terms of the deal say that the San Diego based Qualcomm would have to pay the shareholders of CSR the amount of £9 per share of their holdings in the chip maker. This would represent a 27 percent premium on the closing share price of CSR.

"Combining CSR's highly advanced offering of connectivity technologies with a strong track record of success in these areas will unlock new opportunities for growth," says Qualcomm Chief Executive Steven M. Mollenkopf.

He adds that the acquisition of CSR would enable the company to diversify into a range of markets such as wireless Bluetooth chips in the short-range and audio processing that is present in automotive controls, portable audio technology and wearable devices.

"We look forward to working with the innovative CSR team globally and further strengthening our technology presence in Cambridge and the UK," says Mollenkopf.

CSR revealed that the company's board had unanimously supported the deal which required the usual regulatory and shareholder go-signal.

"We believe that the offer from Qualcomm provides CSR shareholders with an immediate and certain value which is highly attractive," says CSR chairman Ron Mackintosh.

Qualcomm is looking to expand into emerging markets such as unwired home appliances and connected devices that make up "The Internet of Things." In May, the company acquired Wilocity which makes wireless HDMI connections. It also developed AllJoyn which is an open-source platform that allows an exchange of information between devices that are near each other.

CSR or Cambridge Silicon Radio specializes in connectivity and makes chips that are used in portable audio speakers. The company is the pioneer in wireless Bluetooth technology.

CSR Chief Executive Joep van Beurden comments that the combination of the two companies is laudable. Likewise, analyst Clive Longbottom of Quocirca says that Qualcomm's acquisition is a clever move.

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