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Marvell Technology to buy rival chipmaker Cavium for $6 billion

(Reuters) - Chipmaker Marvell Technology Group Ltd ( MRVL.O ) said on Monday it would buy Smaller Rival Cavium Inc ( CAVM.O ) for about $6 billion, as it seeks to expand its wireless connectivity business in a rapidly consolidating semiconductor industry.

Chief Executive Matthew Murphy, who took the top job a year ago, has been focusing on Marvell’s networking business to counteract declining demand for its chips used in hard disk drives of personal computers.

Murphy last year replaced former CEO Sehat Sutardja and President Weili Dai - a husband-wife team who co-founded the company - after an audit committee questioned their management style and hedge fund investor Starboard Value LP made a host of demands.

“With Marvell facing secular challenges on its core chip business, this acquisition is a smart strategic move which puts the company in a stronger competitive position for the coming years,” said GBH Insights analyst Daniel Ives.

In the last two years, the chip industry has witnessed a series of deals as companies try to gain market share in emerging areas such as automotive technologies and connectivity.

READ MORE (Reuters)

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Marvell Technology to buy rival chipmaker Cavium for $6 billion


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