Figure 8 Wireless Inc., a provider of firmware for wireless automated systems, said it has been acquired in an all-stock transaction by its partner Chipcon Group ASA, the parent company of wireless chip developer Chipcon AS.

Terms of the transaction weren’t disclosed. Oslo-based Chipcon said Figure 8 of Sand Diego would become a wholly owned subsidiary. Both Figure 8 and Chipcon are backed by venture capital. Figure 8 has modest funding, closing $3.6 million in its Series B financing in May and $500,000 in its Series A in 2003.

Figure8’s backers included Avalon Ventures, Cardinal Ventures and Viterbi Group, whose president is Andrew Viterbi, co-founder of publicly traded cellular technology company Qualcomm Inc. Freescale Semiconductor Inc., a publicly traded semiconductor company, also invested in Figure 8.

Founded in 1996, Chipcon has raised NOK86 million ($12M US) in financing.

Chipcon has been bundling its RF-transceiver with Figure 8’s network protocol stack, or firmware, through a licensing agreement signed in August.

Chipcon, which is marketing chips based on the ZigBee wireless device networking standard, said the acquisition of the firmware company lets it round out its ZigBee offerings. “They are adding the…part that we did not offer,” said Geir Forre, Chipcon’s president and chief executive.

The ZigBee standard is for low-power wireless sensor networks, such as those controlling a building’s thermostat or automating a home. The standard was ratified last year by the ZigBee Alliance, a California-based industry group of semiconductor companies, equipment makers and others. Both Figure 8 and Chipcon are members of the alliance.

With the acquisition, Figure 8 will be giving to Chipcon its network protocol stack, as well as development tools that equipment makers use to build ZigBee-compliant applications. Chipcon said it will retain all of Figure 8’s 16 employees. On its own, Chipcon had 77 employees, with 70 people at the Chipcon AS headquarters in Oslo. The rest are spread elsewhere in Europe and in the U.S. and Asia.

Figure 8’s headquarters will continue to be based in San Diego and will become Chipcon’s U.S. headquarters. Chipcon has an office in Cupertino, Calif.

The chief financial officer and vice president of business developement at the ZigBee firmware start-up, Barry Rudolph, will become the CFO for the Chipcon Group ASA, located in Oslo. Its chief executive officer, Joe Markee, will be president of the Figure 8 subsidiary. Chief Technology Officer Don Sturek will become CTO of software for Chipcon.

Chipcon’s employees and three founders, a group which includes Forre, holds about half of the company. The other half is split among several investors including Oslo-based Four Seasons Venture Group, with the largest stake in the company at about 25%, and FirstNordic, a mutual fund with the second largest number of shares.