...as CSR merges with SiRF

Bluetooth leader Cambridge Silicon Radio (CSR) is merging with GPS leader SiRF, in a move that will increase CSR's recent move into GPS (see below for low cost GPS chip), capitalising on its penetration of mobile handsets via Bluetooth.
But the move puts it squarely in competition with Broadcom, which acquired Global Locate three years ago and is moving strongly into combining GPS with mobile chipsets.
SiRF as a long established player in GPS has a significant GPS and assisted GPS (A-GPS) patent portfolio that complements CSR's extensive patent portfolio in eGPS. The rationale is that the combined strengths of SiRF and CSR will drive forward the innovation of new chips incorporating GPS and position the enlarged CSR group to be able to take a substantial share of the fast growing GPS market in mobile devices. CSR estimates the GPS attach rate to be around 20% of mobile handsets in 2008 and this is expected to double by 2012.
SiRF shareholders will own 27% of the enlarged CSR group and the boards of both CSR and SiRF unanimously endorse the transaction, with the merger expected to complete late in the second quarter of 2009. SiRF's Diosdado P. Banatao and Kanwar Chadha will be invited to join the CSR Board as Non-Executive Director and Executive Director respectively.
“Financially, strategically and commercially, this is a compelling transaction," said CSR CEO Joep van Beurden. "We expect it to be significantly earnings accretive, to enhance the enlarged group’s financial strength and cash position and to create new and wider revenue opportunities that neither party on its own could pursue as effectively. Strategically, this deal considerably strengthens our leadership position in the Connectivity Centre, a strategy which we believe encapsulates the way our marketplace is developing. Commercially, there is a powerful, complementary fit between the technologies, skill sets and customer relationships of both companies and the way we both see our customers’ needs evolving. Together we create a group substantially better placed both to meet the challenges of today and to emerge even stronger from the current challenging market conditions. This transaction is an exciting opportunity for shareholders, employees and customers.”