Broadcom to acquire Renesas LTE assets

Broadcom, a global innovation leader in semiconductor solutions for wired and wireless communications, today announced a definitive agreement to acquire LTE-related assets from affiliates of Renesas Electronics Corporation.

The acquisition is expected to accelerate availability of Broadcom’s first multimode, carrier-validated LTE SoC platform into early 2014.

Broadcom 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. Broadcom also receives high-quality multimode, multiband, LTE-A/HSPA+/EDGE modem IP that includes support for leading-edge features such as Carrier Aggregation and VoLTE. The acquisition adds quality patents and applications to Broadcom’s IP portfolio and brings some of the world’s most experienced cellular engineers to Broadcom.

“Today’s transaction firmly establishes Broadcom’s presence in the rapidly growing LTE market with a production-ready, carrier-validated SoC,” said Scott McGregor, president and CEO, Broadcom.

Our LTE platform will leverage Broadcom’s rich connectivity portfolio and will deliver an optimized feature set for this fast growing market added McGregor.

In connection with the acquisition, Broadcom expects to pay approximately $164 million in cash. Excluding any purchase accounting related adjustments and fair value measurements, Broadcom currently expects this transaction to be dilutive to earnings per share on a non-GAAP basis by approximately $0.12 in the three months ending December 31, 2013 and dilutive to non-GAAP earnings per share by $0.10-$0.15 in full year 2014.

However, Broadcom currently expects the transaction to be roughly neutral to non-GAAP earnings per share by the second half of 2014 and is expected to be accretive to non-GAAP earnings per share in 2015. The transaction has been approved by Broadcom and Renesas Electronics’ boards of directors, is subject to customary closing conditions, and is expected to close early in the three months ending December 31, 2013.

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