Tsinghua Unigroup approved to purchase Speadtrum Communications Inc in the amount of US $1.78 billion, a Reuters report stated.

Tsinghua Unigroup, a state-owned corporation, is financed by China's Tsinghua University. Spreadtrum, on the other hand, is a China-based cellphone chip designer. It creates chips for feature phones, smartphones and other electronic devices. The chips it develops are able to support wireless communication standards for 2G, 3G and 4G.

Most of the company's sales are from Korea and China. Spreadtrum, which has a reported revenue of US $ 720 million last year, identifies Samsung Electronics and HTC Corp among its clientele.

"Spreadtrum and Tsinghua Unigroup will supplement each other and create enormous synergies in China and abroad," Zhao Weiguo, Tsinghua Unigroup's chief executive officer, said.

Tsinghua Unigroup will obtain all of Spreadtrum's outstanding ordinary shares for US $31.00 for each American depositary share. This amounts to US $10.33 for each ordinary share.

"Tsinghua Unigroup will offer Spreadtrum expertise in consumer products, protection and support of a vast IP portfolio, and access to important capital markets in China," Weiguo added.