Market Overview

Marvell Confirms Merger With Chipmaker Inphi To Create $40B Entity

Marvell Confirms Merger With Chipmaker Inphi To Create $40B Entity

Marvell Technology Group Ltd (NASDAQ: MRVL) on Thursday confirmed its acquisition of semiconductor manufacturer Inphi Corporation (NASDAQ: IPHI).

What Happened: The two companies will create a combined entity —  with a $40 billion enterprise valuation — where Marvell will hold a majority stake with 83% and Inphi will control the balance 17% of the newly-created company.

The merged entity will mobilize Marvell’s vast portfolio of technological solutions with Inphi’s expertise in electro-optics powered data interconnect platform under one roof to provide end-to-end solutions for data infrastructure, Marvell said in a statement. 

Marvell CEO said the agreement would enhance the company's presence across the hyperscale cloud data center market as well as the 5G wireless network infrastructure over the next decade.

The deal will be settled by a cash consideration of $66 and the balance by 2.323 shares of the new company exchanged for each share of Inphi, according to Marvell.

The deal is expected to close sometime in the latter half of next year.

Why Does It Matter: Annual synergies of $125 million are anticipated within 18 months from the deal closure, which in turn would improve Marvell’s non-GAAP EPS.

Marvell’s management estimates that the addressable market could grow up to $23 billion at a 12% CAGR. The number of Cloud & Networking customers with a revenue share above $100 million is expected to double.

Price Action: Inphi stock rallied 26.7% higher on Thursday to close at $140.60 per share. Marvell shares closed 3.34% lower at $38.21.


Related Articles (MRVL + IPHI)

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