Atheros makes semiconductors designed to connect computers wirelessly to the Internet, which will plug a critical gap in Qualcomm's portfolio of technology and give it a foothold in the emerging market for tablet computers, analysts say.
San Diego-based Qualcomm said it has agreed to pay $45 per share for Atheros, which is based in Santa Clara, California. That's a premium of 22 percent over Atheros' closing share price Monday, the last trading day before The New York Times reported the potential deal.
Atheros shares rose 71 cents to $44.71 in pre-market trading Wednesday, while Qualcomm shares rose 44 cents to $51.41.
The boards of both companies have approved the deal, which also requires approval by Atheros shareholders and regulatory clearance.
Qualcomm expects to close the acquisition in the first half of this year.