The British company CSR has agreed to buy Israeli imaging and video technology leader Zoran in a $679 million all-share deal. The sale is expected to be completed in the second quarter of 2011.

CSR is a supplier of wireless connectivity and location chips. It sells Bluetooth, GPS, FM, Wi-Fi and audio devices. It employs about 1,500 people, and posted an operating profit of $376.6 million in the fourth quarter, on revenue of $80.6 million.

Zoran provides imaging and video chips for digital camera, home entertainment and multifunction printer products. It employs about 1,550 people, and posted an operating profit of $186.1 million in 2010, on revenue of $357.3 million.

“The [new group] is going to be in a position to be very relevant to camera manufacturers. The same is true for digital televisions, in cars, in gaming and in handsets,” said CSR’s chief executive, Joep van Beurden. “We expect the merger to enhance the merged company’s financial strength and to create new and wider revenue opportunities that neither party could pursue on its own.”

Zoran’s co-founder and CEO Dr. Levy Gerzberg added:

“With this transaction, we can leverage the world class technology, talent and resources of two great companies and create compelling opportunities for our customers, employees and consumers. As a pioneer in digital video and still imaging, Zoran has an extensive portfolio of proprietary technologies that is highly complementary to CSR’s existing capabilities.”