Two Broadband Chip Rivals Unite To Better Fight The Big Boys; Conexant-Globespan Merger; The two companies plan to push deeper into home with chips for networking.(INTERNET & TECHNOLOGY)

Byline: JAMES DETAR

Chipmaker Conexant Systems Inc. loves to make deals.

Conexant bought 11 companies in 1999 through 2001. Its earnings tanked in the big tech downturn, but its deal-making didn't stop. Instead of buying, it started selling and spinning off companies. Chief Executive Dwight Decker says that by year's end, Conexant will have shed four of those post-1998 acquisitions.

On Monday, Conexant moved back to the other side of the deal-making ledger. The Newport Beach, Calif.-based company said it will buy rival GlobespanVirata Inc. in a stock swap valued at near $1 billion. Decker says it's the biggest deal in the history of Conexant, which Rockwell International spun off in 1996.

"This was the most compelling strategic transaction we saw anywhere on the landscape," Decker said in an interview after the two companies unveiled their plans.

Analysts say there are risks, including some customer overlap, but they generally praised the merger of makers of broadband chips, mostly for the home market.

"Conexant in the past dabbled with so many things," said Steve Rago, an analyst with market researcher iSupply Corp. "They had the Pictos Digital Imaging division that they spun off. And their wireless chip unit, Mindspeed. They were trying to figure out what they were doing.