Qualcomm To Buy UK-based CSR In $2.5 Bln Deal

(RTTNews) - Mobile chip maker Qualcomm Inc (QCOM) Wednesday said it has agreed to buy the entire issued and to be issued ordinary share capital of CSR Plc. (CSRE, CSRXF.PK, CSR.L) by its indirect wholly owned subsidiary Qualcomm Global Trading Pte. Ltd., for about 1.56 billion pounds or nearly $2.5 billion. CSR shares climbed about 30 percent in the morning trade.

Qualcomm expects the acquisition to be accretive to non-GAAP earnings per share in fiscal 2016, the first full year of combined operations.

The firm noted that the acquisition is aligned with its established strategic priorities in its rapidly growing business areas of Internet of Everything or IoE and automotive infotainment.

It is intended that the acquisition by Qualcomm Global Trading Pte. Ltd., or QGT will be implemented by means of a Court-sanctioned scheme of arrangement.

As per the terms of the deal, each scheme shareholder will be entitled to receive 900 pence in cash for each CSR share.

The offer price represents a premium of about 56.5 percent to the closing price per CSR share of 575 pence on August 27, 2014, being the last business day prior to the commencement of the offer period.

The offer price also represents a premium of 66.3 percent to the average closing price per CSR share of 541 pence in the one month to August 27.

Subject to the satisfaction of conditions, including the approval of CSR's shareholders, the transaction is expected to close by the end of the summer of 2015.

Cambridge, UK-headquartered CSR develops multifunction semiconductor platforms and technologies for the Auto, Consumer and Voice & Music markets. Established in April 1999, it employs 2,130 people in eleven countries.

For its 52-week financial period ended December 27, 2013, CSR reported revenue of $960.7 million.

"The addition of CSR's technology leadership in Bluetooth, Bluetooth Smart1 and audio processing will strengthen Qualcomm's position in providing critical solutions that drive the rapid growth of the Internet of Everything...," said Steve Mollenkopf, chief executive officer of Qualcomm.

The CSR directors unanimously intend to recommend that CSR Shareholders vote in favour of the scheme at the court meeting and in favour of the general meeting resolutions.

Each CSR director has irrevocably undertaken to vote in favour in respect of their own beneficial holdings totaling 884,457 CSR shares. This represents about 0.54 per cent of the existing issued capital of CSR as at October 14, 2014.

In August end, CSR announced an approach for a possible offer from US-based semiconductor company Microchip Technology Inc. (MCHP). However, CSR rejected the price proposed by Microchip, and said its board is considering its options for the company.

QCOM closed Tuesday's trading at $71.86, up 1.63 percent.

In London, CSR shares are currently trading at 856 pence, up 197.5 pence or 29.99 percent, on a volume of 4.83 million shares.