SAN FRANCISCO — Marvell Technology Group agreed to buy rival chip vendor Cavium for $6 billion in cash and stock in the semiconductor industry's latest blockbuster deal.

The deal, announced Monday (Nov. 20), would remake Marvell (Santa Clara, Calif.), bring its addressable market to more than $16 billion by bringing together its HDD and SSD storage controllers, networking and wireless connectivity semiconductor together with San Jose-based Cavium's multi-core processing, networking communications, storage connectivity and security chips, Marvell said. The combined entity will have annual revenue of about $3.4 billion.  

News of a possible deal between the firms was first reported earlier this month by the Wall Street Journal and other media outlets.

Matt Murphy
Matt Murphy

The deal to acquire Cavium would give Marvell a fresh start after an accounting scandal that last year resulted in the resignations of Marvell's founders, CEO Sehat Sutardja and President Weili Dai.

"This is an exciting combination of two very complementary companies that together equal more than the sum of their parts," said Matt Murphy, who took over as Marvell president and CEO last year, in a press statement.

"Together, we all will be able to deliver immediate and long-term value to our customers, employees and shareholders," Murphy added.

Under the terms of the deal, Marvell will pay $40 per share in cash and 2.1757 Marvell common shares for each Cavium share. The deal is expected to close in mid-2018, Marvell said.

— Dylan McGrath is the editor-in-chief of EE Times.

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Article originally published on EE Times US.