Qualcomm Swoops in to Strike Deal With U.K. Chip Group CSR

San Diego semiconductor maker Qualcomm Inc. (QCOM) on Wednesday swooped in on U.K. rival CSR plc in a surprise agreed bid worth £1.6 billion ($2.6 billion) after the target rejected an August approach from Microchip Technology Inc. (MCHP)

Qualcomm would pay 900 pence per CSR share, a 37% premium to Tuesday's close and 57% higher than CSR's close Aug. 27, the day before Microchip went public with its takeover approach.

"Combining CSR's highly advanced offering of connectivity technologies with a strong track record of success in these areas will unlock new opportunities for growth," said Qualcomm CEO Steve Mollenkopf in a statement.

CSR in August gave little information as it rejected the approach from Microchip but also noted it would begin reviewing its options. The U.K. Takeover Panel had given Chandler, Ariz.-based Microchip until Wednesday to reach an agreement with CSR. Chipmakers have been linking up to better wrestle with the slim margins created by a crowded market.

Munich-based Infineon Technologies AG in August agreed to buy El Segundo, Calif., rival International Rectifier Corp. (IRF) for $3 billion to broaden its portfolio and expand in the U.S. and China. Intel Corp. (INTC) is also working to complete its $650 million purchase of the Axxia chip business from Avago Technologies Ltd. (AVGO)

CSR is based in Cambridge, England and is best known for its Bluetooth components which enable wireless communication between devices. It had first-half sales of $374.5 million, down from $500.4 million a year earlier as it wound down "legacy businesses." Profit fell to $41 million from $58.4 million. It employs 2,130.

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