LONDON — Wireless chip group CSR (Cambridge, England) is buying GPS chip specialist SiRF (San Jose, Calif.) in a $136 million, all-share deal , which represents a 91 percent premium to SiRF's close on Feb. 9.

Separately, Bluetooth chip pioneer CSR reported fourth-quarter revenue of $140.1 million, down from $232.5 million in the year-earlier period. Pre-tax losses for the quarter came in at $15.8 million versus the $30.8 million profit in the third quarter and $49.3 million profit from the same period last year.

Following completion, expected in the second quarter of the year, SiRF shareholders will own approximately 27 percent of the enlarged CSR group. Completion of the merger is subject to the approval of both SiRF and CSR shareholders, and the usual regulatory clearances.

SiRF's Diosdado Banatao and Kanwar Chadha will join the CSR Board as Non-Executive Director and Executive Director respectively.

CSR management expects $35 million of costs synergies a year from the deal, which gives it access to the very latest in silicon for location services.

SiRF is one of the largest independent suppliers of chips for GPS, with strong hardware, software and systems. Its GPS and assisted GPS (A-GPS) patent portfolio complements CSR's extensive patent portfolio in eGPS.

CSR says the combination will drive the innovation of new chips incorporating GPS and position the enlarged CSR group to be able to take a substantial share of the fast growing GPS market in mobile devices.

CSR estimates the GPS attach rate to be around 20 percent of mobile handsets in 2008 and this is expected to double by 2012.

Commenting on the deal, Joep van Beurden, CSR's CEO, said: "Strategically, this deal considerably strengthens our leadership position in the Connectivity Centre, a strategy which we believe encapsulates the way our marketplace is developing. Commercially, there is a powerful, complementary fit between the technologies, skill sets and customer relationships of both companies and the way we both see our customers' needs evolving."

Van Beurden added the companies will be "better placed both to meet the challenges of today and to emerge even stronger from the current challenging market conditions."

SiRF's technology has been integrated into a wide range of mobile consumer devices such as automobile navigation and telematics systems, PNDs, mobile phones, mobile computers, and mobile internet devices.

SiRF generated revenues of $232 million in 2008, and had gross assets of $195 million as at 27 December 2008

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