Qualcomm announced a $47 billion acquisition of NXP Semiconductors, a move it said “accelerates our strategy to extend our leading mobile technology into robust new opportunities”.

Steve Mollenkopf, CEO of the acquirer, said: “By joining Qualcomm’s leading system-on-chip capabilities and technology roadmap with NXP’s leading industry sales channels and positions in automotive, security and IoT, we will be even better positioned to empower customers and consumers to realise all the benefits of the intelligently connected world.”

The deal has been rumoured for a month or so, although earlier (speculative) figures valued it at ‘just’ $30 billion.

According to a statement, the combined business will have annual revenue of more than $30 billion, with strong positions across mobile, automotive, IoT, security, RF and networking.

Indeed, the move will enable Qualcomm to significantly boost its position beyond its core mobile stronghold: using figures for fiscal 2015, 61 per cent of the US firm’s sales come from mobile, which would be reduced to 48 per cent for a combined Qualcomm/NXP in the same period.

Contrastingly, Qualcomm’s 8 per cent of sales from auto, IoT and other would be boosted to 29 per cent.

The deal will increase Qualcomm’s serviceable addressable market to $138 billion by 2020 (a gain of around 40 per cent).

Qualcomm will pay for the deal using its own cash and new debt ($11 billion worth), “structured to enable tax efficient use of offshore cash flow to rapidly reduce leverage”.

It also sees “substantial synergy opportunities”, giving the figure of $500 million within two years of the transaction closing. Qualcomm has been undertaking its own strategic realignment plan already, with NXP working through its combination with Freescale.

The deal has been approved by boards of both companies. It is expected to close by the end of calendar 2017 subject to regulatory approvals and other closing conditions, and subject to NXP shareholder acceptance at necessary levels.