British Bluetooth chip designer CSR snapped up by Qualcomm for £1.56bn

Cambridge Silicon Radio, a start-up from the last dot.com boom, sells out to US chip giant

Chip maker Qualcomm has trumped its rival Microchip Technology by swooping for UK Bluetooth communications specialist CSR in a £1.56bn ($2.5bn) deal.

It comes after Microchip Technology tabled a formal offer to the company in August, which was rejected as too low. CSR had been in talks with Microchip Technology over a potential deal however, with a deadline imposed by British regulators for Wednesday.

The offer from Qualcomm, however, is around 37 per cent above yesterday's closing price on the London Stock Exchange and is almost certain to be voted through by shareholders.

CSR - formerly Cambridge Silicon Radio - was a start-up from the last dot.com boom, established to exploit the Bluetooth short-range wireless connectivity standard when it was first developed. It has since grown to dominate that market, while establishing itself in a range of other wireless technology niches.

Liberum Capital analyst Eoin Lambe, however, expressed surprise that it was Qualcomm coming in to scoop up CSR. He told Bloomberg: "There's a lot of technology overlap between the two companies."

That may imply that Qualcomm's primary motive in buying CSR is to reduce competition and may not be good news for CSR staff in Cambridge and elsewhere. Two years ago, CSR sold its wireless unit to Samsung for $310m. As a result of that and other divestitures, it posted half-year revenues of $374.5m in the six months to the end of June, down from $500.4m in the previous interim.