Qualcomm to make a $2.5B bet on Bluetooth with CSR buy

Qualcomm will buy one of the most venerable British technology companies, the chip design firm CSR, once known as Cambridge Silicon Radio.

[company]CSR[/company] was one of the pioneers in Bluetooth technology, and these days – having sold off its mobile business to Samsung a couple years back – it is again concentrating on the technology, in particular Bluetooth LE/Smart, the low-power variant designed for connecting internet of things devices.

The company recently rejected a takeover bid, rumored to be worth as much as $3 billion, from U.S. firm Microchip, on the basis that the price was insufficient. [company]Qualcomm[/company] said late Tuesday that it will pay around $2.5 billion for CSR, so perhaps those rumors were somewhat overenthusiastic.

Qualcomm said the buy will give it more “products, channels and customers” in the internet of things — an area where it is already intensely active — and in automotive infotainment, another focal point for CSR, which also produces in-car connectivity, audio and navigation products. One area of likely interest will be the CSRMesh protocol that allows Bluetooth Smart/LE devices to relay messages between themselves (Zuli is also playing around with this idea).

The purchase is expected to close in the summer of next year, and marks the continued evolution of Qualcomm from a chipmaker focused on licensed radio technology for carriers to an essential technology component of our wireless-yet-connected way of life today. Back in 2011, when it purchased Wi-Fi chip maker Atheros, my colleague Stacey Higginbotham explained that Qualcomm had ambitious goals to build technology that lets end devices travel seamlessly across all of the popular radio networks, and with this deal it gets the silicon expertise to bring Bluetooth into that vision. We can ask Murthy Renduchintala, EVP of Qualcomm Technologies and co-president of Qualcomm CDMA Technologies, for more about the deal and Bluetooth’s place in the internet of things at our Structure Connect event next week in San Francisco.

CSR’s directors say they consider the terms of the acquisition to be “fair and reasonable.” Here’s what chairman Ron Mackintosh said:

While the CSR Directors believe that CSR is now strongly positioned to execute its strategy of delivering growth and sustainable returns in the medium and long term, we believe that the offer from Qualcomm provides CSR Shareholders with an immediate and certain value which is highly attractive. The CSR Directors believe the Acquisition recognises CSR’s long term prospects and growth potential, and takes into account the dynamics of the global market and the competitive landscape in which it operates.

CSR was founded in 1998. It came out of the so-called Silicon Fen — the Cambridge hub (the U.K.’s most interesting real tech hub) that also spawned chip design titan [company]ARM[/company].