Parthus merges with American DSP Group; TECHNOLOGY: Companies with chips in common.
CHIP designer Parthus Technologies has unveiled plans for a "merger of equals" with an American counterpart.
The Dublin-based company is joining forces with the IP licensing arm of US firm DSP Group (DSPG) to win more business in the digital communications market.
The deal will create a new company called ParthusCeva, employing around 400 people, with Parthus shareholders taking a 49.9pc stake.
While some job cuts are expected, a research facility in Northampton - which develops global positioning equipment - will be unaffected by the deal.
Parthus chief executive Brian Long will take the post of vice president at the new company, which will be based in San Jose, California.
DSPG's chairman and chief executive Eli Ayalon will serve as chairman while Parthus president Kevin Fielding will become chief executive.
Mr Long said the impetus for the merger had come from the group's customers, which include Motorola, Hitachi and Fujitsu.
"Many have approached us and DSPG and suggested we should be supplying them jointly with technology offerings, " he said.
Parthus makes a range of chips for mobile internet devices such as personal audio players and mobile phones, often powered by DSPG's own technology.
The new company's primary listing will be on the Nasdaq but Parthus insisted the deal was a merger and not a takeover by DSPG's Ceva business.
Elaine Coughlan, chief financial officer, said, "The deal has been structured in the way it has to maintain a tax efficient structure."
As well as taking 49.9pc stake in the new business Parthus shareholders will receive a capital payment of around $60m (pounds 42m).
Ms Coughlan said ParthusCeva should generate revenues of around $80m (pounds 56m) in 2003. The merger is expected to be completed by July.
Shares in Parthus rose 4pc after the deal was announced, rising 1 1/2p to 45
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|Publication:||Western Mail (Cardiff, Wales)|
|Date:||Apr 6, 2002|
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