Bermuda-based Marvel Technology made a big announcement to start the trading week off.
The company announced that it would be acquiring San Jose-based Cavium for $80 a share, or $6 billion. Marvell has its U.S. headquarters in Santa Clara, California.
The two rivals will be joining forces in the high end chip market that is used in wireless communications, self driving cars, and data centers.
Marvell Technology Group CEO Matt Murphy commented, “This combination expands and diversifies our revenue base and end markets, and enables us to deliver a broader set of differentiated solutions to our customers.”
Murphy became the leader of the company last year. Marvell was founded by husband and wife Sehat Sutardja and Weili Dai who were forced out of the company over a year ago after an accounting irregularity.
According to chief strategy officer Daniel Ives who works at GBH Insights, “Cavium helps diversify (Marvell’s) business in the networking space. The Cavium chip franchise will enable Marvell to further expand into product wings and better compete vs. some of the big boys in the space like Intel and Broadcom.”
Marvell’s acquisition of Cavium is subject to shareholder and regulatory approval and is expected to be completed by mid-2018.
Disclaimer: We have no position in Marvell Technology Group Ltd. (NASDAQ: MRVL) nor Cavium Inc. (NASDAQ: CAVM) and have not been compensated for this article.