BREAKING NEWS

BREAKING NEWS

Marvell Technology to buy Cavium for $6 billion

Now Reading:

Marvell Technology to buy Cavium for $6 billion

Text size Aa Aa

(Reuters) – Chipmaker Marvell Technology Group Ltd <MRVL.O> said on Monday it would buy smaller rival Cavium Inc <CAVM.O> in a deal valued at about $6 billion (£4.5 billion), as it seeks to gain scale in a semiconductor industry that is rapidly consolidating. Shares of Marvell were up 1 percent while shares of Cavium were up 7.7 percent in premarket trading. Under the deal, Marvell will offer $40.00 per share in cash and 2.1757 of its shares for each Cavium share. The exchange ratio was based on a purchase price of $80 per share, using Marvell’s undisturbed price prior to November 3, when media reports of the transaction first surfaced. Marvell’s offer represents a premium of 11 percent to Cavium’s close on Friday. The Hamilton, Bermuda-based Marvell Technology makes storage and WiFi equipment while Cavium builds network equipment. “This is an exciting combination of two very complementary companies that together equal more than the sum of their parts,” Marvell’s Chief Executive Matt Murphy said in a statement. Marvell plans to fund the deal with a combination of cash on hand from the combined companies and $1.75 billion in debt financing, the company said. Goldman Sachs & Co LLC was the financial adviser to Marvell while Qatalyst Partners LP and J.P. Morgan Securities LLC were the financial advisers to Cavium.

(Reporting by Sonam Rai and Laharee Chatterjee in Bengaluru; Editing by Arun Koyyur)
euronews provides breaking news articles from reuters as a service to its readers, but does not edit the articles it publishes. Articles appear on euronews.com for a limited time.