Zoran announced that it has entered into a definitive agreement to acquire Microtune. Under the agreement, Zoran will pay $2.92 in cash for each share of Microtune’s common stock, resulting in a transaction price of approximately $166 million, or $84 million net of cash acquired. Both boards of directors have approved the transaction, which is expected to close after Microtune shareholder approval, regulatory clearance and satisfaction of customary conditions specified in the agreement. Zoran expects the acquisition to be accretive immediately following the close of the deal, which is expected to be in the fourth quarter of 2010.

Microtune, a pioneer in the development and deployment of silicon tuners for cable set-top-box, broadband cable modem, DTV, and automotive entertainment markets, offers a product portfolio that is complementary and synergistic to Zoran’s strategic objectives.

Zoran is increasing its focus on the STB market as part of its strategy to become a complete provider of solutions for consumer home entertainment.