Genesis Microchip

(GNSS)

and

Pixelworks

(PXLW) - Get Report

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have decided to terminate the proposed merger the companies agreed to earlier this year.

As part of ending the deal, Pixelworks will pay Genesis $5.5 million as a reimbursement for its expenses.

Eric Erdman, the interim CEO of Genesis, said in a press release that the company was "pleased that we were able to reach an amicable agreement with Pixelworks and recover substantially all of our costs and expenses associated with this transaction. We believe that Genesis Microchip can now move forward with a renewed focus on serving customers."

Pixelworks President, CEO and Chairman Allen Alley said the decision "to terminate the merger was based on our mutual agreement of what was best for the stockholders of each company."

Genesis and Pixelworks said in March that they would merge in a deal valued at the time at $600 million. Genesis shareholders would have owned about 62.5% of the combined firm, and Pixelworks shareholders would have held about 37.5%.

In Instinet trading before the opening bell, Genesis was trading down $1.31, or 12.4%, to $9.26. Pixelworks was climbing 76 cents, or 11.3%, to $7.46.