US-based Cirrus Logic has agreed a deal worth £291m for the acquisition of Wolfson Microelectronics – the Edinburgh-based audio chip manufacturer and one of the UK's leading tech firms.
The deal remains subject to the approval of regulatory authorities and Wolfson shareholders, but it is anticipated that Cirrus Logic will complete the takeover during the second half of the year.
News of the deal came at the same time Wolfson published its first quarter results to March 30th, which saw the firm report a 40% decrease in year-on-year revenue to $28.8m (£17m).
Wolfson said its performance had been impacted by "customer inventory overhangs" – the result of a "faster-than-anticipated transition from 3G to 4G smartphones" witnessed during 2013.
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Cirrus Logic said the purchase of Wolfson – once approved – will let it "expand its customer base" by offering a wider range of "end-to-end audio solutions for portable audio applications".
According to the Telegraph, the US firm is "heavily reliant" on business from Apple and had replaced Wolfson as chip supplier to the iPhone from the 3GS version of the smartphone onwards.
"This acquisition strengthens Cirrus Logic’s core business as a leader in audio signal processing components," said Cirrus Logic president and chief executive officer Jason Rhode.
Michael Ruettger, chair of the Wolfson Microelectronics board, added: "We believe this will create a powerful platform for future growth, above and beyond our standalone potential."
by Pete Hayman