By Erin McCarthy 
 

Broadcom Corp. (BRCM) said Tuesday that it will sell certain assets and non-exclusive licenses to QLogic Corp. (QLGC) for $147 million in cash.

Broadcom relies heavily on the handheld-device market, as it makes chips for about half the world's tablets and smartphones. For instance, it supplies chips for Apple Inc.'s (AAPL) iPads and iPhones, as well as for Samsung Electronics Co.'s (SSNHZ, 005930.SE) Galaxy phones.

While Broadcom has sought to expand its share of the network-processor market, the company has also worked to further tighten its hold on the mobile-communications space by trying to keep up with the transition to next-generation technology.

Under the deal, QLogic--a supplier of switches, controller and other networking products--will acquire certain 10/40/100Gb Ethernet controller-related assets and non-exclusive licenses to intellectual property relating primarily to Broadcom's programmable NetXtreme II Ethernet controller family.

Broadcom, which provides semiconductor solutions for wired and wireless communications, will also be an application-specific integrated circuit, or ASIC, supplier to QLogic, as part of a long-term supply agreement.

QLogic will also license certain Broadcom patents under a non-exclusive agreement that will cover QLogic's Fibre Channel products in exchange for a license fee of $62 million.

The deal has been approved by both companies' boards and is expected to close in the first quarter.

Excluding potential one-time gains related to this asset sale, Broadcom expects the transaction to be slightly accretive to earnings per share in 2014, while QLogic said the transaction will immediately add to revenue and adjusted earnings per share.

Write to Erin McCarthy at erin.mccarthy@wsj.com

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