Recognizing the pervasiveness of Wi-Fi technology, Qualcomm Inc. (QCOM) said it plans to buy Wi-Fi chip maker Atheros Communications Inc. (ATHR) for $3.1 billion. Qualcomm said the acquisition will help it expand to new businesses beyond cellular. Both stocks were slightly up in trading this morning.
Wi-Fi connectivity is increasingly popular in portable consumer and enterprise electronics, including the digital home. Also, wireless operators, which earlier dismissed Wi-Fi solutions because the technology runs in the unlicensed spectrum bands, have started to embrace Wi-Fi as a way to offload traffic from the macrocellular network.
Santa Clara, Calif.-based Atheros makes a full line of Wi-Fi chips, including fixed, portable and mobile solutions. The fabless semiconductor company formed in 1998.
Qualcomm will pay $45 per share in cash for Atheros. The acquisition should close in the first half of this year. While Qualcomm said it bought the company for its technology, the acquisition should boost earnings slightly in fiscal year 2012, the first full year of combined operations.
“It is Qualcomm’s strategy to continually integrate additional technologies into mobile devices to make them the primary way that people communicate, compute and access content. This acquisition is a natural extension of that strategy into other types of devices,” said Dr. Paul E. Jacobs, chairman and CEO of Qualcomm. “The combination of Qualcomm and Atheros is intended to accelerate this opportunity by utilizing best-in-class products for communications, computing and consumer electronics to broaden existing customer relationships and expand access to new partners and distribution channels.”
Atheros President and CEO, Dr. Craig H. Barratt, is expected to join Qualcomm as president of Qualcomm Networking & Connectivity.