UK-based chipmaker Dialog Semiconductor is to acquire US chip firm Atmel for $4.6bn (£3bn) in a cash and stocks deal.
The acquisition will create a company with a combined value (annual revenues) of $2.5bn, or £1.6bn.
In 2014, Dialog posted sales of $1.15bn (£740m), up 28 per cent on 2013; while Atmel's full-year results increased two per cent to $1.4bn (£902m), compared with the previous year.
In a press release Dialog said it hopes to achieve projected annual cost savings of $150m (£96m) within two years through "synergies"; usually a euphemism for job losses.
Dialog said the deal will boost its presence in the mobile phone, 'internet of things', and automotive markets.
"The combined company will address an attractive, fast growing market opportunity of approximately $20bn (£13bn) by 2019," it said.
The deal is the latest in a string of chip business hopping into bed with each other this year.
In July there were also reports that Chinese government owned chipmaker Tsinghua Unigroup was bidding $23bn to buy Micron, the USA's top DRAM and flash manufacture.
The Dialog-Atmel transaction is expected to close in the first quarter of 2016.
Jalal Bagherli, Dialog chief exec, said the deal will create a "powerful force in the semiconductor space", adding that our "new, enlarged company will be a diversified, high-growth market leader". ®