British chipmaker CSR said it had settled its legal battle over technology patents with U.S. rival Broadcom Corp, boosting the Bluetooth and Wi-Fi specialist's shares on Tuesday.

CSR said it would pay $67.5 million to Broadcom over the next five years, the majority of which would be offset by a reduction in legal costs of at least $50 million, to settle the dispute, which predates its acquisition of GPS chip firm SiRF in 2009.

Shares in CSR had risen 10.3 percent to a five-month high of 392.5 pence by 0835 GMT, as analysts welcomed the settlement.

We believe this is a very solid result for CSR from a strategic perspective as it removes the overhang of litigation and fears from some market participants of a big negative charge, UBS said in a note.

Analysts at Espirito Santo Investment Bank said that due to CSR's reporting structure it should result in about 10 percent upgrades to consensus operating profit and EPS estimates for 2011.

Apart from the financial impact, the settlement of patent dispute with Broadcom should remove a distraction for CSR's management and customers, they said.

(Reporting by Paul Sandle)

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