Qualcomm confirms $47bn deal to buy Dutch rival NXP

US technology firm Qualcomm is set to acquire its Dutch rival NXP Semiconductors for $37bn, with the price rising to $47bn when debt is included.

The deal was first touted last month and marks one of the first instances of chip-makers preparing for technology advances related to the increased connectivity of electric devices, otherwise known as the "Internet of Things".

Qualcomm will pay $110 per share in cash for NXP, which has been a key player in the fast-growing auto-chip market, as tech and auto companies gear up for the race to develop the first fully-autonomous self-driving vehicle.

The San Diego-based company is set to expand its reach beyond its core strength of making chips for mobile devices, as well as licensing patents for practically every smartphone company.

"We have taken significant action to build a foundation for profitable growth and the acquisition of NXP is strongly aligned with our strategy," said Qualcomm chief executive Steve Mollenkopf.

"Our companies both have substantial expertise in delivering industry-leading solutions to our global customers, built upon a shared commitment to technology innovation, focused R&D investments and strong financial and operational discipline," he added.

Shares in Qualcomm rose 2.9% to $70.20 in pre-market trading after the deal was announced.

S&P Global Ratings placed Qualcomm on its CreditWatch with negative implications on Thursday after news of the acquisition became official, but stressed that it has sufficient liquidity to manage the transaction.

"The acquisition will use of much of Qualcomm's significant overseas cash balances, but we expect the company to maintain sufficient liquidity through the transaction and beyond given its strong cash flow," said S&P analyst Andrew Chang.