Atheros Communications, Inc. (ATHR) yesterday completed the acquisition of Intellon Corporation.

California-based Atheros Communications is a leader in the designing of chipsets used in WLAN devices.

On Dec. 11, 2009, Intellon stockholders approved the merger agreement. Intellon’s stock is no longer listed on the NASDAQ exchange. Atheros paid $113.6 million in cash and issued approximately 5 million shares in relation to the merger.

Based on the Intellon stockholder elections, those stockholders of Intellon who elected to receive all cash or who made no election received $7.30 in cash, those stockholders who elected to receive all Atheros common stock received $3.33 in cash and approximately 0.145 shares of Atheros common stock, and those stockholders who elected a mix of cash and stock received $3.63 in cash and approximately 0.134 shares of Atheros common stock.

Intellon designs, develops and markets integrated circuits (ICs) on a global basis for powerline communications or high-speed communications over the existing electrical wiring.

Atheros expects that this acquisition will strengthen its networking technology portfolio by including Intellon’s industry-leading powerline communications (PLC) solutions for home networking, networked entertainment, broadband-over-powerline (BPL) access, Ethernet-over-Coax (EoC) and smart grid management applications.

Management expects that by combining Atheros’ wireless LAN and Ethernet products with Intellon’s market-leading powerline communications products, the company will become a leader in providing networking solutions throughout the digital home.

ATHR is among the smaller U.S. publicly traded companies in the WLAN space and competes with bigwigs like Broadcom Corp. (BRCM) and Texas Instruments (TXN) in this space.

Increased penetration in WiFi access point market and share gains in the Ethernet controller/switch markets and the Bluetooth chip market are the expected growth drivers. Atheros also appears to be making headway in the embedded WiFi market with its new innovative solutions. It is expected that the company will see a significant ramp in its Ethernet product line and higher adoption of its Align single-stream 802.11n products, driven mostly by strength in demand for low-end notebooks and netbooks.

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