SAN JOSE, Calif. - Looking for new markets, MediaTek Inc. has acquired Ralink Technology Corp., a supplier of wireless home networking and broadband access semiconductors.
With the deal, MediaTek expands into several new fronts. Ralink makes chips for WiFi, DSL, USB and other applications. Taiwan's MediaTek is strong in the cell-phone chip market. The combined company will offer its customers a portfolio of Wi-Fi solutions as well as technologies like Bluetooth, GPS, xDSL, and Ethernet.
Feeling the heat, MediaTek is seeking a comeback after struggling in recent times. In a statement, M.K. Tsai, chairman of MediaTek, said: “We expect Wi-Fi connectivity to continue increasing in popularity in the portable consumer and enterprise electronics industries, as well as the digital home. Thus, MediaTek’s addressable market in game consoles, media players, tablets, and TVs will instantaneously expand with the addition of Ralink’s full line of Wi-Fi chips, including fixed, portable and mobile solutions; next generation innovations in technologies like 802.11 ac/ad and VDSL; and world-class customers.
Under the terms, MediaTek has acquired the firm through a share swap of 1 share for 3.15 shares of Ralink, making MediaTek as the surviving entity. The transaction has been approved by the respective boards of directors of MediaTek and Ralink and is expected to take effect on Oct. 1, 2011, pending shareholder approval and other regulatory reviews.
Last year, Ralink announced an agreement to take over the broadband chipset supplier TrendChip Technologies Corp. (Hsinchu, Taiwan).
The deal somewhat mirrors another acquistion in the wireless space. As reported, Qualcomm has entered into a definitive agreement to purchase Atheros for $45 per share in cash, representing a value of $3.1 billion. The deal creates a company with combined sales of $11 billion, based on revenues from 2009.