Qualcomm buys Flarion for $600m

With another $205m if the wireless love-in goes well

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By Jo Best, 11 August 2005 15:50

NEWS Qualcomm has announced it is to buy broadband wireless access technologies firm Flarion in a deal that could be worth up to $805m.

Qualcomm, the company which owns CDMA technology, will pay $600m outright for its acquisition in stock and cash, with additional payments totalling up to $205m if the company achieves certain milestones over the next few years.

Qualcomm was attracted to Flarion by its team and portfolio of intellectual property, which includes the next-generation wireless technologies OFDMA (Orthogonal Frequency Division Multiplex Access) and FLASH-OFDM, known as a type of 3.5G.

Flarion's patents will make an attractive marriage with Qualcomm's own, according to the firm's CEO, Paul E Jacobs.

"The combination of Flarion and Qualcomm's engineering resources greatly strengthens our position... We believe CDMA will provide the most advanced, spectrally efficient wide-area wireless networks for the foreseeable future but with Flarion we can now more effectively support operators who prefer an OFDMA or hybrid OFDM/CDMA track for differentiating their services," he said in a statement.

Qualcomm's third quarter netted the company $1.36bn in revenue. It announced that it expects its earnings for 2006 to be diluted by three cents per share as a result of the acquisition, and said it will take one-off charges of $10m as a result of R&D work already ongoing at Flarion.

The deal is expected to close this year, subject to regulatory approval.

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