Sonic Solutions and DivX today jointly announced that they have signed a definitive merger agreement for Sonic Solutions to acquire DivX. Long term this move for Sonic may be recognition of the demise of the disc and the move to online network players.

For more than 20 years, Sonic has been developing technologies for the preparation and delivery of entertainment content in formats like — CD, DVD, Blu-ray Disc and most recently Internet delivery of video. The acquisition of DivX is expected to advance Sonic’s mission to deliver technology that makes it easier and more convenient for retailers, online services, Hollywood studios, and manufacturers of CE and mobile devices to distribute premium digital video content over the Internet. DivX is expected to enable Sonic to deepen and broaden the technology it offers for Internet-based video delivery and expand its relationships with leading retailers and consumer electronics manufacturers.

DivX technology — encoders for formatting video, decoders for playback, and digital rights management (DRM) for content protection — resides on over 300 million devices shipped into the global market from all major CE manufacturers including over 8,500 models of digital televisions, DVD and Blu-ray Disc players, and over 80 different mobile handsets.

Sonic believes that the acquisition of DivX will provide a number of key benefits:

Good for the share price
Much better Internet video offering
More visibility for consumer electronics
The DivX brand is seen as one of worldwide quality

“Sonic and DivX are both market leaders in digital media and share similar visions about a better media future for consumers,” stated Kevin Hell, CEO of DivX. “We also share similar cultures and both recognize the tremendous market opportunity that lies ahead for Internet video services. By combining our products, technologies, partnerships, and talented employees, we immediately create a complete end-to-end delivery platform for digital media, with expanded reach and capacity, at a perfect time to capitalize on the market’s rapid development. With the acquisition of DivX, Sonic should be extremely well positioned to serve existing customers, attract new partners, and increase our market presence and potential.”

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Sonic To Acquire DivX