04.09.2013 14:24:07
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Broadcom To Buy LTE-related Assets From Renesas Electronics For $164 Mln
(RTTNews) - Chip maker Broadcom Corp. (BRCM) said Wednesday that it has agreed to acquire LTE-related assets from Japanese chipmaker Renesas Electronics Corp. (RNECF) for about $164 million in cash. The company expects the acquisition to accelerate availability of its first multimode, carrier-validated LTE system-on-chip or SoC platform into early 2014.
Irvine, California-based Broadcom, whose major customers include Apple Inc. (AAPL) and Samsung Electronics (SSNLF), noted that it is gaining a dual-core LTE SoC that is ready for volume production and is carrier-validated by leading global operators in North America, Japan and Europe. The company will also receive high-quality multimode, multiband, LTE-A/HSPA+/EDGE modem IP that includes support for leading-edge features such as Carrier Aggregation and VoLTE.
Scott McGregor, President and CEO of Broadcom said, "Today's transaction firmly establishes Broadcom's presence in the rapidly growing LTE market with a production-ready, carrier-validated SoC. Our LTE platform will leverage Broadcom's rich connectivity portfolio and will deliver an optimized feature set for this fast growing market."
Excluding any purchase accounting related adjustments and fair value measurements, Broadcom currently expects this transaction to be dilutive to adjusted earnings per share by about $0.12 for the fourth quarter ending December 31, 2013 and also dilutive to adjusted earnings per share by $0.10-$0.15 in fiscal 2014.
However, Broadcom currently expects the transaction to be roughly neutral to adjusted earnings per share by the second half of 2014 and accretive to adjusted earnings per share in 2015.
Broadcom also tightened its revenue outlook for the third quarter ending September 30, 2013. The company now expects revenue for the quarter in a range of $2.075 billion to $2.175 billion, compared to the prior outlook of $2.05 billion to $2.20 billion.
On average, forty analysts polled by Thomson Reuters expect the company to report revenues of $2.13 billion for the third quarter.
Separately, Renesas Electronics said it has decided to transfer all the shares of Renesas Mobile Europe Oy or RME and Renesas Mobile India Private Limitedor RMI to Broadcom, along with certain assets related to its LTE modem technology.
Renesas said in late June that it would stop development activities and sales expansion of the 4th generation wireless modem developed by RME and RMI, and work towards the termination of this business. The transaction enables Renesas to quickly exit from the LTE Modem business and focus more on its core business, while enabling Broadcom to strengthen its semiconductor business for communications.
BRCM closed Tuesday's trading at $25.18. In Wednesday's pre-market, the stock is adding $0.11 or 0.44 percent to $25.29.
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