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CSR slots Zoran into connected future

Video processing and Bluetooth, the perfect partnership?

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Cambridge-based CSR is merging with the Californian Zoran Corporation, creating a top 10 fabless electronics company with chip designs for wireless connectivity and video processing.

The deal will see Zoran valued around $679m, and Zoran shareholders ending up with 35 per cent of the combined company. That's thanks to a CSR-funded share buyback to the tune of $240m, resulting in a deal that could be described as an acquisition by CSR based on 35 per cent cash and 65 per cent stock.

Fabless companies don't make chips, they license their designs or outsource their manufacture. CSR, who used to be known as Cambridge Silicon Radio, provides Bluetooth, Wi-Fi and GPS chip designs, the latter since acquiring Sirf almost exactly a year ago. Zoran provides designs for video processing and digital imaging chips, used in set-top boxes, cameras and printers as well as elsewhere.

"Combining the two highly complementary technology portfolios is designed to uniquely position the merged company to deliver advanced platforms to capture and stream media-rich content," says the release from the companies.

Certainly the two companies have little overlap, and both are very successful (and profitable) in their respective fields. It might not be immediately obvious, but there are increasing instances where the technologies are complementary too. DNLA enables one to throw phone-based video onto the TV screen, or take a video into the kitchen on the phone's screen – so having chips capable of handing wireless comms and video-processing becomes increasingly useful.

Not to mention the $50m in cost savings that the companies, who employ more than 3,000 people between them, expect to get out of the merger. ®

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