MediaTek has announced plans to merge with fellow IC design company MStar Semiconductor following the completion of its tender offer to buy a portion of MStar shares.

MediaTek revealed its board of directors has approved a tender offer to purchase shares of MStar. MediaTek will acquire MStar shares for 0.794 MediaTek shares and NT$1 in cash per MStar share, and is looking to purchase 212-254 million MStar shares, equivalent to 40-48% of MStar's outstanding shares.

MediaTek indicated that upon the completion of the tender offer and subject to approvals from relevant authorities, the firm plans to conduct a follow-on merger with MStar and expects to complete the merger process in early 2013.

"MediaTek and MStar both possess competitive advantages in the fields of wireless communication and digital home. In light of the recent trends of industry consolidation, this transaction is expected to become a new milestone for the IC design industry," said MediaTek chairman MK Tsai in a statement.

Via: http://www.digitimes.com/news/a20120622PR203.html

Both companies are very large players on TV market and players market.
Due to simple fact that most players and TVs are now computers, running on very complex LSI, such merger is not a surprise.
Design of such chips is extremely complex and costly.