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Samsung buys CSR mobile handset division

UK chip manufacturer CSR sells its mobile business to handset maker Samsung for $310m

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Samsung Electronics will buy CSR’s mobile development division for $310m.

The acquisition will see the transfer of 21 patents to Samsung from the UK chip manufacturer, which has been struggling with losses since a restructuring last year, which included the purchase of US rival Zoran.  

By handing over its mobile development business – which focuses on Wi-Fi, Bluetooth and location service chips for handsets – CSR hopes it can refocus on its more profitable divisions, making processors for TVs, car entertainment systems and music players.

"This transaction will accelerate our transformation into a higher gross margin platform company operating in attractive growth markets where we have a leading market position,” said Joep van Beurden, CEO of CSR.

“As a result, we will be a more competitive, more differentiated and more profitable business."

The agreement includes the transfer of 310 staff to Samsung, with most – 292 employees – in R&D roles and 18 more marketing and support employees.

"I believe that, under Samsung's ownership, the handset operations will be in a better position to prosper in the global handset market,” added van Beurden.

Samsung has also agreed to pay $34.4m for a 4.9% stake in semiconductor manufacturer CSR, hoping to make more of a return on the areas it is proving successful. 

However, it is written in the terms of the acquisition that it will not be allowed to use any of the technology it has purchased in anything other than mobile products, such as its own TVs or audio equipment.

Market reaction proved strong, with the share price rising almost 37% to 299p at the time of publication.

The deal is expected to complete in the fourth quarter of 2012.

 

 

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