The deal will combine the two companies to create an intellectual property (IP) licencing platform covering entertainment content, consumer electronics and semiconductors. The companies said the transaction will also lead to greater research and development capabilities.

The combined company will be called Xperi but will continue to offer entertainment services under the TiVo brand name. It will be headquartered in San Jose, California. 

Xperi’s chief executive officer, Jon Kirchner, will become chief executive officer of the combined company, while TiVo’s chief executive officer, David Shull, will continue as a strategic advisor.

Kirchner said: “Together, we will be able to integrate TiVo’s leading content aggregation, metadata, discovery, and recommendation capabilities with our home, automotive, and mobile technology solutions ... through greater scale and diversity, we will deliver attractive and sustainable long-term cash flow and shareholder value.”

Shull added: “With Xperi’s annual licensing of more than 100 million connected TV units, and complementary relationships with major content providers, consumer electronics manufacturers, and automotive OEMs, our combined company will transform the home, car, and mobile entertainment experience for the consumer.”

TiVo had previously said it intended to separate its product and IP business, but the company has now suspended this plan. Following the closing of the transaction, the two companies’ product and IP businesses will be integrated and operated as separate units.

The deal has been approved by the companies’ boards of directors and is expected to close in the second quarter of 2020, subject to regulatory and shareholder approvals and other customary closing conditions.