RF Micro Devices will acquire Sirenza Microdevices in a deal valued at $900 million, the companies announced Monday.

The deal could create the world’s largest producer of radio frequency components for cell phones and wireless devices.

RF Micro (Nasdaq: RFMD) will pay shareholders of Sirenza some $300 million in cash and $600 million in stock. The deal as agreed to unanimously by the boards of both companies gives Siernza owners a 17 percent premium over the stock price as of Friday.

RFMD shares traded down 11 cents at $6.10 after the deal was announced. They ended ther day down 2 percent to $6.07. Siernza (Nasdaq: SMDI) shares jumped 8 percent, or $1.12, to $15.29 to open trading. By the day’s close, SMDI ended up climbing 8.5 percent, or $1.20, to $15.38.

The deal gives RFMD resources for growth in a variety of markets and expands its potential sales target to more than $20 billion, the company said in a statement. Siernza focuses on broadband, cable TV, wireless infrastructure and WiMAX. Products include chips for amplifiers, power amplifiers, cable TV amplifiers and other devices as well as satellite radio.

Sirenza, which is based in Colorado, also has operations in China and Germany.

Once the deal closes, RFMD will own 67 percent and Siernza 33 percent of the merged company. The merger is expected to be completed by Dec. 29.

Bob Bruggeworth, chief executive officer of RFMD, will be the CEO of the combined company.

Bob Van Buskirk, CEO at Siernza, will relocated to North Carolina and lead a new business unit at RFMD called Multi-Markets Products Group.

"This strategic acquisition brings together two companies with leadership positions and considerable expertise in [radio frequency] systems and solutions," Bruggeworth said in a statement.

“It creates the world’s largest, most diversified and best positioned RF company, with a broad set of customers and a diversified product portfolio of high performance components and systems- level solutions,” he added. “The transaction will allow RFMD to capitalize on the RF integration and systems-level design expertise we continue to pioneer in the cellular world and apply those capabilities across Sirenza’s broad footprint in multiple high-growth RF markets, including broadband/CATV, wireless infrastructure, WiMAX and aerospace and defense.”