Qualcomm has agreed to buy NXP Semiconductors for an enterprise value of about $47 billion, as it seeks to expand the reach of its chips from phones to cars. 

Qualcomm said it would offer $110 per share in cash, a premium of 11.5% to NXP Semiconductor's close last night.

The company said it intends to fund the transaction with cash on hand and new debt. 

The transaction, which is expected to close by the end of 2017, is structured to use offshore cash flow in a tax-efficient manner to rapidly reduce leverage, Qualcomm said. 

Qualcomm said it expects the deal to significantly add to adjusted earnings immediately upon close and generate $500m of cost savings annually within two years after the deal closes. 

The deal would make Qualcomm, which currently supplies chips to Android smartphone makers and Apple, a bigger supplier to the fast-growing automotive industry. 

The combined company is expected to have annual revenue of more than $30 billion, the companies said. 

San Diego-based Qualcomm is facing slowing smartphone sales and stiff competition from Chinese and Taiwanese rivals. 

The company is currently ranked third in terms of revenue among global semiconductor companies in 2015, while Eindhoven, Netherlands-based NXP is ranked seventh, according to research firm IHS.