California-based Conexant sells microchips that are used in digital subscriber line and other broadband communications, while GlobespanVirata sells digital DSL and other networking chipsets and software.
Under the terms of the deal, GlobespanVirata shareholders will receive 1.198 shares of Conexant common stock for each share of GlobespanVirata stock.
Both boards have unanimously approved the merger, but the transaction is subject to the customary closing conditions including shareholder and regulatory approval. The merger should close in the first quarter of 2004. Conexant shareholders will own 62.75% of the combined company, and GlobespanVirata shareholders will own 37.25%.
The combined company will be known as Conexant and will continue to trade as Conexant’s on Nasdaq. However, the new company will be based at GlobespanVirata’s Red Bank, New Jersey headquarters.
After the merger, the company is expected to have an annual revenue run-rate of roughly $1.2 billion, and will employ 2,400 workers around the world. Based on both companies’ share prices at the end of October, the combined company is expected to be valued at $2.8 billion.
This article was based on material originally published by ComputerWire.
