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Apple (AAPL) agreed to acquire the majority of Intel's (INTC) smartphone modem business in a $1 billion transaction, the companies said in a statement on Thursday after the close.

Shares of Intel, which also reported positive Q2 earnings after the close, were rising 5.6% to $55.08 in after-hours trading on Thursday while Apple shares were little changed at $207.13. The Wall Street Journal first reported on the impending deal between the two tech giants earlier this week.

According to the statement, some 2,200 Intel employees will join the Cupertino, Calif., tech company, along with the acquisition of intellectual property, equipment and leases.

Intel, the Santa Clara, Calif., chipmaker, and Apple said they expected the deal to close in the fourth quarter, conditioned on regulatory clearance and other matters.

"Combining the acquired patents for current and future wireless technology with Apple's existing portfolio, Apple will hold over 17,000 wireless technology patents, ranging from protocols for cellular standards to modem architecture and modem operation," the statement said.

"Intel will retain the option to develop modems for non-smartphone applications, such as PCs, internet of things devices and autonomous vehicles."

Intel will now put its "full effort into [5G network technology], where it most closely aligns with the needs of our global customer base, including network operators, telecommunications equipment manufacturers and cloud service providers," Intel CEO Bob Swan said in the statement.

Goldman Sachs was financial adviser and Skadden, Arps, Slate, Meagher & Flom was legal adviser to Intel on the deal.

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