The news comes less than a month after a U.S. trade panel ruled that SiRF infringed on three of Broadcom's GPS patents and barred SiRF imports of the products.

Under the terms of the agreement, SiRF stockholders will receive 0.741 of a CSR share for each share of SiRF common stock they own or $2.06 of CSR stock for each SiRF share, a total value of $136 million. That represents a 91 percent premium over SiRF's stock price on February 9.

When the transaction closes, SiRF stockholders will own approximately 27 percent of the merged companies and CSR shareholders are expected to own approximately 73 percent. The boards of both companies unanimously approved the deal, which is expected to close in the second quarter of 2009.

Customers of the combined company include four of the top five handset manufacturers, and the top five personal navigation device makers. R&D efforts will continue to support each company's existing product lines as well as new multifunction radio chips, the companies said.

"Our ability to offer customers both leading edge location and connectivity technologies will be a key competitive advantage," said Dado Banatao, chairman of Sirf in a press statement.

Both Banatao and Kanwar Chadha, SiRF's co-founder and vice president of marketing, will join the merged company's board.

"We expect it to be significantly accretive, to enhance the enlarged group's financial strength and cash position and to create new and wider revenue opportunities that neither party on its own could pursue as effectively, added Joep van Beurden, chief executive of CSR.