LSI Logic Corp. has agreed to buy C-Cube Microsystems Inc. in an all-stock deal valued at $878 million.
The deal, slated for completion June 30, will offer LSI an entry into the world of silicon-based codec technologies for transferring video and voice to and from home-based multimedia networks.
"The acquisition of C-Cube will enhance LSI Logic's technology strengths in designing and manufacturing in rapidly growing communications and broadband entertainment markets,'' said Wilfred J. Corrigan, LSI Logic's chairman and chief executive, in a prepared statement.
"The synergy of these two technology leaders is consistent with our business strategy of capitalizing on the convergence of worldwide communications and broadband entertainment."
C-Cube, Milpitas, Calif., which was one of the pioneers of the MPEG digital video standards, supplies circuits for digital set-top box, DVD and emerging CODEC-based applications, such as personal video recording (PVR), home media servers, recordable DVD, residential gateway, and streaming video.
C-Cube's customers include Sony, Samsung, LG Electronics, JVC, Motorola, Pace and Philips. For 2000, the company reported $265 million in revenues and employed 600.