British chip firm CSR PLC said it is to acquire and merge with Zoran Corporation in a deal it says is worth some $679 million (£418.5 million).
Zoran shareholders will receive 1.85 ordinary shares of CSR in the form of American Depositary Shares, for each share of Zoran common stock they hold. CSR said it will also return up to US$240 million to shareholders via an on-market share buyback programme
CSR is a fabless designer of Bluetooth, GPS, FM, Wi-Fi and audio chips, while Zoran provides imaging and video technology for digital camera, home entertainment and multifunction printer products.
According to the statement announcing the deal, the merged company "will provide differentiated, integrated technology that addresses the rapidly growing market for connected, location-aware multimedia devices including handsets, digital cameras and home entertainment equipment."
CSR reckons the acquisition will strengthen its core business by adding imaging and video capabilities within its existing end markets.
Commenting on the Merger, Joep van Beurden, CEO of CSR, said: "Digital electronic devices are becoming increasingly connected and full of media-rich features, including the ability to stream images from your camera to your PC or video conferencing from your Smartphone. Zoran's market-leading imaging and video capabilities, combined with our own connectivity and location capabilities, make this a great opportunity for us.
"The same is true in the home entertainment space where wireless connectivity is increasingly being adopted in a range of consumer devices such as digital TVs - Zoran's image technology combined with our connectivity skills will provide a differentiated proposition which will be appealing for our customers.
Following completion of the deal, Zoran shareholders will own approximately 35 per cent of the enlarged CSR group. Dr. Levy Gerzberg, co-founder, president, CEO and director of Zoran will join the CSR board as a non-executive director.