Marvell to Buy Inphi in $ 10 Billion Chip Offering
Chip vendor Marvell said Thursday that it agreed to buy Inphi Corp in a $ 10 billion cash-and-stock deal (approximately Rs. 74.6 billion) aimed at expanding Marvell’s footprint in data centers and 5G network infrastructure.
Marvell competes against Broadcom to supply chips that move data on copper cables. But Inphi designs chips that move data through fiber optic cables hundreds of times faster than copper cables.
Companies like Amazon, Alphabet Google, Microsoft and Facebook they use Inphi chips for optical connections within the massive data centers that power their online services.
Inphi has also won agreements to help Microsoft link its data centers with high-speed optical connections and to connect various parts of 5G networks.
Data centers and 5G infrastructure “are our two key markets,” Marvell CEO Matt Murphy told Reuters in an interview. “They’re there,” Murphy said of Inphi, “so the fit is really good.”
The deal comes amid a flurry of ties in the semiconductor industry this year. Advanced Micro Devices on Tuesday said would buy Xilinx on a $ 35 billion deal (roughly Rs. 2,57,900 crore) From Nvidia $ 40 billion (approximately Rs. 2.93.6 billion rupees) purchase by SoftBank’s Arm and Analog devices $ 21 billion (approximately Rs. 1,56,700 crore) acquisition from Maximum.
Under the agreement, Marvell will give Inphi shareholders $ 66 (approximately Rs. 5,000) in cash and 2.32 shares of the combined company for each Inphi share. After the deal, Marvell shareholders will own about 83 percent of the combined company, and Inphi shareholders will own about 17 percent.
Marvell plans to use cash and balance sheet debt to fund the deal, assuming around $ 4 billion (approximately Rs. 29.9 billion rupees) in new debt in connection with the transaction with financing commitments of JPMorgan Chase.
While Marvell is based in Silicon Valley, it is currently based in Bermuda. After the transaction, both Marvell and Inphi will become subsidiaries of a new US-domiciled holding company. The deal is expected to close in the second half of 2021.