Qualcomm announced on Thursday (27 October) that it has reached a deal to acquire the Netherlands-based NXP Semiconductors. The California-headquartered company said it will purchase all of the issued and outstanding common shares of NXP for $110 (£90.32) per share. This translates the total deal value to about $47bn.

Qualcomm said the deal will be financed through cash at hand and new debt. "The transaction is structured to enable tax efficient use of offshore cash flow to rapidly reduce leverage," the company said in a statement. It added that the deal was expected to close by the end of 2017, subject to regulatory approvals.

Qualcomm said once combined, it could expect annual revenues of more than $30bn and serviceable addressable markets of $138bn in 2020. It added that the deal would bring in substantial strategic and financial benefits.

The first benefit that the world's largest chipmaker highlighted was leadership. It said the takeover would combine leadership across general purpose and automotive grade processing, security, automotive safety sensors and RF. This it said would help the company deliver more complete system solutions.

Another benefit it referred to was the go-to-market capabilities. It said the combined company would help strengthen its distribution channels, which in turn will allow it to serve its customers better.

Qualcomm added that there was also the benefit to earnings per share (EPS) as the deal was expected to be significantly accretive to non-GAAP EPS immediately upon closing the deal. The deal will also generate $500m of annualized run-rate cost synergies within two years after the transaction closes.

The NXP Semiconductors deal follows the July M&A deal, where Japan's SoftBank Group decided to acquire ARM Holdings, the Cambridge-based chip-designer.

Commenting on the deal, Steve Mollenkopf, CEO of Qualcomm said in a statement, "The NXP acquisition accelerates our strategy to extend our leading mobile technology into robust new opportunities, where we will be well positioned to lead by delivering integrated semiconductor solutions at scale."

Mollenkopf added that the combination of both the companies will "bring together all technologies required to realize our vision of secure connections for the smarter world, combining advanced computing and ubiquitous connectivity with security and high performance mixed-signal solutions including microcontrollers".