Dialog Semiconductor PLC announced a $4.6 billion cash-and-stock deal to buy Atmel Corp. , the latest sign that chip makers are betting on a technology trend called the Internet of Things.

Dialog, a U.K.-based company, sells chips used to manage power in high-end smartphones from Apple Inc. and others. Atmel, based in San Jose, Calif., is best known for chips called microcontrollers that provide computing power for many kinds of consumer and business hardware.

Jalal Bagherli, Dialog’s chief executive, said the deal will help the company reduce its dependence on a few smartphone makers. At the same time, he said, acquiring Atmel’s customer base and line of products will make Dialog a major player in chips for connected cars, wearable devices and other networked gadgets lumped under the catchall phrase Internet of Things, or IoT.

Atmel had signaled it might be considering a sale on Aug. 24, when the company said it was extending the retirement date of Chief Executive Steven Laub through the completion of a strategic review process. Mr. Laub, who had led the company since 2006, had said in May that he would retire on Aug. 31.

Investment banker Qatalyst Partners led a sale process that apparently attracted multiple bidders.