Intel buys digital TV assets for US$70 million

Intel has agreed to buy the digital TV components business of Zarlink Semiconductor Ltd. for $70 million, it said Friday.

Intel has agreed to buy the assets of a U.K. company that makes components for building digital TVs and other consumer electronics gear, it announced Friday.

The U.S. chip maker will pay approximately US$70 million for the client-side RF (radio frequency) components business of U.K.-based Zarlink Semiconductor, a subsidiary of Zarlink Semiconductor of Ottawa, Zarlink said in a statement.

The move is part of Intel's strategy to sell collections of related software and silicon parts used by manufacturers to build consumer electronics products.

The deal includes demodulators and tuners for receiving digital audio and video broadcasts to TVs, set-top boxes, recorders and other devices. They allow the devices to receive, extract and decompress the broadcast and then display or store the content, said Intel, in California.

The business generated revenue of US$53 million in its 2005 fiscal year, according to Zarlink. Selling the assets will allow Zarlink to focus on its network communications, optical and ultra-low power businesses, it said.

Intel will pay US$68 million in cash and US$2 million in "other consideration," Zarlink said. The deal is subject to closing conditions, including the retention of Zarlink employees, and is expected to close in November, it said.

The acquisition would complement Intel's purchase earlier this year of Oplus Technologies, which makes video processing technologies, Intel said.

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James Niccolai

IDG News Service

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