Marvell Technology Group Ltd acquires peer Inphi Corp for $10 billion

In a statement chip supplier Marvell Technology Group Ltd said, it has agreed to acquire Inphi Corp in a cash and stock deal worth $10 billion aimed at broadening its footprint in the 5G network infrastructure and in the data centers space.

While Marvell supplies chips that move data around on copper-based cables, its peer Inphi designs chips that move data over fiber-optic cables, which is hundreds of times faster than copper cables.

Tech giants including Google Inc, Amazon.com, Facebook Inc and Microsoft Corp use Inphi’s chips for optical connections inside the massive data centers that power their online services.

Data centers and 5G infrastructure “are our two key markets” said Marvell Chief Executive Matt Murphy. “They are right in there, so the fit is really good.”

The deal comes at a time when there is a flurry of  M&A activity in the semiconductor industry this year.

On Tuesday, Advanced Micro Devices Inc said it would acquire Xilinx Inc in a $35 billion deal, following Nvida Corp’s $40 billion purchase of Arm Ltd and Analog Devices Inc’s $21 billion acquisition of Maxim Integrated Products.

As part of the deal, Marvell will give Inphi shareholders $66 in cash and 2.32 shares of stock in the combined company for each share of Inphi. After the deal, Marvell shareholders will own about 83% of the combined company, with Inphi shareholders owning about 17%.

Marvell plans to use a combination of debt and cash to fund the deal and will be taking in around $4 billion in new debt in connection with the transaction with financing commitments from JPMorgan Chase & Co.

Silicon Valley-headquartered Marvell is currently domiciled in Bermuda. Following the transaction, Marvell and Inphi will become subsidiaries of a new U.S.-domiciled holding company.

The deal is expected to close in the second half of 2021.

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