Wi-Fi, powerline to merge in Atheros-Intellon deal

Atheros plans to buy the pioneering maker of home powerline network gear for $US244 million

Wi-Fi chip vendor Atheros Networks plans to acquire Intellon, a maker of chips for home powerline networking equipment, for about $US244 million.

Intellon was a pioneer in technology that lets consumers use the electrical sockets and wiring in their homes to link computers and consumer electronics devices in fast local networks.

The company says its patented technology, first shipped in products in 2001, is at the heart of the HomePlug standard.

Atheros said in a press release that it intends to combine its Wi-Fi products with Intellon's powerline gear, providing dynamic meshing of wired and wireless networks for multimedia, data and voice applications.

It expects the deal to close in the fourth quarter.

Most consumers with home LANs use Wi-Fi, but a number of vendors and industry groups, including HomePlug, offer other systems that claim to provide more speed and reliability than wireless.

The HomePlug Alliance says its HomePlug AV can provide speeds as fast as 200Mb per second.

As telecommunications carriers and cable operators deliver multiple HDTV streams and consumer electronics vendors introduce ways for various devices to interact, the need for fast home networks may grow.

Intellon said it has shipped more than 40 million chipsets and counts 50 service providers as customers.

The HomePlug Alliance counts such heavyweights as Intel, Comcast, Motorola and Cisco's Linksys division among its members.

Shareholders representing about 22 percent of Intellon's outstanding shares have signed an agreement to vote their shares in favor of the deal, the companies said.

Intellon shareholders have various options for what they'll receive in exchange for their shares, but Atheros expects to issue between 4.2 million and 5.1 million shares of its common stock and pay about $US115 million and $US141 million in cash.

Tags mergers & acquistionsWi-Fiethernet over powerlinesIntellonAtheros

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Stephen Lawson

IDG News Service

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