Avago Technologies Ltd. (NASDAQ: AVGO) announced Monday morning that it will acquire LSI Corp. (NASDAQ: LSI) for $11.15 a share, or a total of about $6.6 billion. The stock in both firms was halted in premarket trading.

Avago currently makes semiconductors that are used by both Apple Inc. (NASDAQ: AAPL) and Samsung Electronics in the companies’ smartphones, and business has been brisk as both Apple and Samsung have rolled out new phones this year. With Apple’s recent deal to supply iPhones to China Mobile Ltd. (NYSE: CHL), the world’s largest wireless carrier, prospects for Avago have never been brighter.

LSI is a longtime supplier to the disk drive and flash memory market. Its main competitors are Marvell Technology Group Ltd. (NASDAQ: MRVL), NXP Semiconductors N.V. (NASDAQ: NXPI) and STMicroelectronics N.V. (NYSE: STM). Unfortunately for LSI, its market cap of around $4.3 billion made it the smallest player in this group, even though it has been in business the longest.

The pairing could become a potent combination, as Avago’s CEO noted:

This highly complementary and compelling acquisition positions Avago as a leader in the enterprise storage market and expands our offerings and capabilities in wired infrastructure, particularly system-level expertise. This combination will increase the Company’s scale and diversify our revenue and customer base. In addition to these powerful strategic benefits, as we integrate LSI onto the Avago platform, we expect to drive LSI’s operating margins toward Avago’s current levels, creating significant additional value for stockholders.

Investors like this deal — for both parties. Avago shares rose nearly 16% once premarket trading resumed. Shares were trading at $52.85, well above the 52-week range of $30.57 to $48.31.

LSI’s shares were up nearly 39% at $10.97, again well above the 52-week range of $5.99 to $8.53.

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