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A Marvell Technology Group Ltd. flag flies exterior the corporate’s headquarters constructing in Santa Clara, California.
Chipmaker Marvell Technology has agreed to ambad smaller peer Cavium for round $6 billion, because it seeks to develop within the networking gear sector, individuals aware of the matter stated on Sunday.
The deal will enable Marvell to diversify away from its conventional storage units enterprise following an settlement with Starboard Value final yr to just accept three new administrators nominated by the activist hedge fund to its board.
Marvell plans to announce its cash-and-stock acquisition of Cavium on Monday, the sources stated, asking to not be recognized forward of an official announcement. Marvell and Cavium didn’t instantly reply to requests for remark.
Marvell CEO Matt Murphy, who took the reins of the chipmaker final yr, has launched into a restructuring of the corporate, slashing jobs and searching for so as to add choices in areas akin to knowledge facilities and wi-fi communications.
Based in San Jose, California, Cavium produces community, safety, server, and switching processors and methods. Last yr it acquired QLogic, a producer of interface units for storage space networks, for about $1.three billion.
Marvell has a market capitalization of $10 billion whereas Cavium, whose shares have risen greater than 10 p.c for the reason that Wall Street Journal reported earlier this month that the businesses have been in superior talks, has a market capitalization of $5.2 billion.
Mergers and acquisitions exercise within the semiconductor sector has been choosing up. Earlier this month, chipmaker Qualcomm rejected rival Broadcom $103 billion takeover bid, one of many greatest ever in expertise dealmaking, saying the provide undervalued the corporate and would face regulatory hurdles.