Conexant, GlobespanVirata announce 'strategic merger'
By John Walko -- CommsDesign.com -- November 3, 2003 (7:19 a.m. EST)
LONDON — Two of the biggest players in chips for broadband and home networks, Conexant Systems Inc. and GlobespanVirata, Inc. are to merge in an all-share deal announced today, Monday 3rd November.
The merged company is valued at approximately $2.8bn with annual revenues of approximately $1.2bn. The new company will retain the Conexant name.
The 'strategic merger' has been unanimously approved by the boards of directors of both companies. Based on the stock split and the value of the respective shares as of market close on Friday, October 31, 2003, current Conexant shareholders will own 62.75 percent and current GlobespanVirata shareholders will own 37.25 percent of the combined company's stock.
The transaction is subject to customary closing conditions, including shareholder and regulatory approvals, and is expected to be completed in the first quarter of next year.
"Combining GlobespanVirata with Conexant allows us to complementour leadership in broadband communications capabilities with leadership in broadband media processing capabilities, including broadcast video encoders and decoders as well as digital set-top box system solutions for cable, satellite, terrestrial data and digital video networks," said Armando Geday, president and chief executive officer of GlobespanVirata, who will serve as the CEO of the combined group.
Dwight Decker, chairman and CEO of Conexant will be chairman of the new company.
"With the addition of GlobespanVirata's highly complementary product portfolio, we gain key end-to-end digital subscriber line connectivity with a leading position in central office applications worldwide. We also benefit by adding GlobespanVirata's leadership position in wireless local area networking, a critical technology for the digital home”, said Decker.
“From a financial perspective, we have the opportunity to capture significant operating efficiencies, and we anticipate that the merger will be accretive within six to nine months from the close of the transaction," Decker added. "Together, we will have the scale and scope to make the necessary R&D investments for continued innovation leadership in wired and wireless communications and multimedia applications for the digital home."
The merged company will employ approximately 2,400 people worldwide and will be headquartered in Red Bank, New Jersey at GlobespanVirata's current headquarters.
commsdesign.com |
