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Shares of semiconductor maker Cavium soared to a new record high on Monday after Marvell Technology announced a $6bn takeover deal for the smaller chipmaker.

Cavium shares jumped 8 per cent after the opening bell on Monday to as much as $82.60. Marvell shares, meanwhile, ticked up 1 per cent to $20.50.

The deal, announced Monday morning, will see California-based Marvell acquire all the outstanding shares of Cavium for $40 a share in cash, and 2.1757 shares per Cavium share. The transaction values Marvell shares at $80 apiece, based on their price before November 3, when reports of a possible deal first emerged, giving the transaction a value of about $6bn.

Both companies’ boards have already approved the deal, Marvell said. Marvell said it expects the deal to make it a leader in infrastructure solutions with annual revenue of approximately $3.4bn. Including Monday’s share movement, Cavium has a market cap of about $5.24bn, while Marvell’s market cap is just over $10bn.

Marvell president and chief executive Matt Murphy called the deal “an exciting combination of two very complementary companies that together equal more than the sum of their parts.”

It’s the latest deal to shake up the US semiconductor sector, which has seen a flurry of activity this year. At the beginning of the month, Qualcomm rejected an unsolicited $130bn takeover offer from rival Broadcom, paving the way for a possible hostile takeover attempt.

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