Netgear, which makes routers and other networking equipment, has said it will acquire the popular router maker Netgear as it continues its search for a buyer.
The deal, which is subject to regulatory approval, is expected to close by the end of the year.
Netgear will continue to operate as a separate company under the Netgear umbrella.
Netgear shares fell as much as 8% to $14.82 in after-hours trading.
NetGear, which also makes servers and other devices for the Internet of Things, was up 8.7% to US$6.96 on Thursday, its best day in more than a year.
Netlanders founder John Chambers, who had been chairman of the board of Netgear since 2007, had hoped to sell the company to an investor in the next 12 months.
The company said in a filing on Wednesday that it had made a $1bn cash offering and had raised $1.3bn in equity.
It said it expected to complete its strategic transformation by the fourth quarter.
NetGear shares are up $4.45, or 6.6%, on Wednesday.