MediaTek Inc. (2454) agreed to buy MStar Semiconductor Inc. (3697) in a stock and cash deal that values the smaller rival at $3.8 billion, and end competition between the two Taiwanese designers of chips used in televisions and phones.
MediaTek plans to acquire up to 48 percent of MStar in a tender offer before a full merger expected to close early next year, the two Hsinchu, Taiwan-based companies said in a statement today. MStar shareholders would get 0.794 of a new MediaTek share plus NT$1 ($0.03) in cash for each stock held, a 20 percent premium to today’s closing price, they said.