LAS VEGAS, ( TheStreet) -- Analysts and investors applauded Qualcomm's ( QCOM) $3.1 billion move to acquire wireless chip rival Atheros ( ATHR) announced Wednesday. Typically expensive deals, like the $45 a share cash offer from Qualcomm for Atheros, would send the buyer's shares down on dilution worries. But this deal is getting only positive blowback, largely because it will give Qualcomm's already strong position in 3G and 4G technology an added boost in areas like WiFi and GPS technology.
The move comes as Qualcomm announced Wednesday that its Snapdragon processors and LTE chips will be inside new 4G devices at Verizon ( VZ). Verizon is expected to introduce some of those mobile devices Thursday at CES in Las Vegas. The Atheros buy isn't only seen as a good fit strategically -- the financial contribution to Qualcomm from Atheros is expected to be large and immediate. In a note Wednesday, Morgan Stanley's Ehud Gelblum estimated that Atheros would potentially add $935 million in revenue this year and $1 billion next year. From a profit perspective, Gelblum estimates it would add a nickel a share to the 2011 bottom line and another 7 cents a share next year. Atheros shares jumped nearly 19% Tuesday after The New York Times' DealBook first broke the news. Meanwhile, Qualcomm shares were up 1% to $51.89 in early trading Wednesday. Two chip shops that don't stand to gain anything except stiffer competition from the deal is Broadcom ( BRCM) and Texas Instruments ( TXN). Both saw shares drop about 1.2% and 1% early Wednesday. --Written by Scott Moritz in Las Vegas.>To contact this writer, click here: Scott Moritz, or email: firstname.lastname@example.org.To follow Scott on Twitter, go to http://twitter.com/MoritzDispatch.>To send a tip, email: email@example.com.