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Qualcomm to Acquire CSR

Qualcomm Inc. agrees to buy CSR plc in deal that values the equity of the UK chipmaker at £1.56bn

Qualcomm, the world’s largest maker of mobile phone chips, has agreed to pay 900 pence a share for leading Bluetooth chip-maker CSR. The recommended all-cash offer represents a 56.5% premium on the share price before the start of the offer period, according to CSR.

CSR had previously rejected a bid from Microchip Technology, saying that the latter’s undisclosed offer was too low. The two had remained in talks to reach a deal but the UK’s Takeover Panel had imposed a deadline of yesterday for any fresh bid from Microchip. Qualcomm’s bid was announced just hours before this deadline expired.

While there is a possibility of further bids being made for CSR, this is perhaps unlikely given the high premium being offered by Qualcomm.

Joep van Beurden, CSR’s chief executive, said the Qualcomm deal would give his company, which will now become a significant division within Qualcomm, the resources to compete with bigger rivals.

“This deal is a ringing endorsement of CSR’s product, technology and our team,” he said. “If you look at the overall lay of the land in the semiconductor industry, it is very important to have scale, and with this transaction we’ve achieved that.

“I think it’s a compliment to the British tech scene. Qualcomm is the global leader . . . it’s a very good to be part of that, and it will allow us to continue to grow our business over the next couple of years.”

Qualcomm said the acquisition would strengthen its position in the so-called internet of everything, where everyday objects, from watches to fridges, are able to interact with each other and connect to the web.

Whether CSR’s staff will be as happy with the take-over as their management and Qualcomm’s remains to be seen; many, particularly CSR’s senior engineers, value the company’s status as an independent business and may feel less attached to the company after it’s merger. In addition, there will be concerns about different business practices being imposed on them from the new parent company. The combined company’s management will certainly have to tread carefully to retain CSR’s technical excellence.