Computer chipmaker Infineon has agreed to sell its wireless unit to Intel for $1.4 billion, enabling the US firm to boost its presence in the smartphone market.
The cash transaction is expected to close in the first quarter of 2011, Infineon said in a statement today.
The wireless unit will remain as a standalone business, Intel said.
"The acquisition of Infineon's WLS business strengthens the second pillar of our computing strategy - Internet connectivity - and enables us to offer a portfolio of products," Intel chief executive Paul Otellini said.
Infineon shares closed down 0.9 per cent at 4.61 euros ($5.86) in Frankfurt on Friday, recouping some of the losses they posted after Intel warned that its third-quarter revenue would fall short of its own expectations due to weak consumer demand on personal computers. Intel shares closed largely flat at $18.37.
The move comes just over a week after Intel announced its $7.7-billion offer for anti-virus software company McAfee,its largest acqusition.
Reuters