Irish computer chip designer Parthus Technologies is to merge with Israeli technology company DSP Group, the companies said today.
DSP, which was founded in Israel but is now based in California, said it planned to spin off Ceva, its semiconductor intellectual property licensing division which will merge with Parthus.
The merger has been unanimously approved by the boards of directors of both companies. The new company will be called ParthusCeva.
Under the merger terms, shareholders of DSPG and Parthus will own about 50.1 per cent and 49.9 per cent of ParthusCeva, respectively.
Parthus shareholders will also receive a cash payment of about $60 million as part of a court-approved repayment of capital.
Parthus shares rose 3 per cent to 45p in London this morning. The company will brief city analysts later about the deal.
Parthus and the Ceva Business said they have significant but complementary strengths in product range, geographic coverage and customer base.
Current Parthus chairman Mr Brian Long, who will be deputy chairman of the new company, says: "It was a logical step for us to look at this merger.
"What we are doing is creating a very strong company. We will have a very dominant position in terms of customer base."
Parthus is a leader in designing and licensing semi-conductors for the mobile Internet. The Ceva Business is the leading supplier of Digital Signal Processor (DSP) cores to the semiconductor industry and its SmartCoreso technology is the licensed DSP core of choice in the mobile phone market.
Mr Kevin Fielding, president of Parthus who will be chief executive of ParthusCeva, said: "This is a compelling combination that brings together two leading companies with complementary technologies, roadmaps, customer bases and target markets".
He said: "By combining DSPG’s leading DSP cores with Parthus’s portfolio of platform-level IP, we believe ParthusCeva will be uniquely positioned to deliver to our customers integrated solutions based on our open-standard processor architecture".
The merger is expected be completed by the end of the third quarter - subject to US regulatory approval.