The deal marks the second big tie-up of semiconductor companies this week, following Advanced Micro Devices' (AMD) - Get Advanced Micro Devices, Inc. Report $35 billion acquisition of Xilinx (XLNX) - Get Xilinx, Inc. Report.
Marvell said in a statement Thursday it intends to reorganize so that the combined company will be domiciled in the United States. The combined company will have an enterprise value of about $40 billion.
"Our acquisition of Inphi will fuel Marvell's leadership in the cloud and extend our 5G position over the next decade," said Matt Murphy, Marvell CEO and president. "Inphi's technologies are at the heart of cloud data center networks and they continue to extend their leadership with innovative new products, including 400G data center interconnect optical modules, which leverage their unique silicon photonics and DSP technologies. We believe that Inphi's growing presence with cloud customers will also lead to additional opportunities for Marvell's DPU and ASIC products."
Marvell agreed to pay $66 a share in cash and 2.323 shares of stock for each share of Inphi. The deal values Inphi at roughly $157.83 a share.
Inphi shares were up 26.5% to $140.38 in trading Thursday. Marvell was down 2.72% to $38.46.
"We believe this to be a highly complementary deal as it will result in Marvell combining its infrastructure semiconductor solutions with Inphi's cutting edge high-speed data movement technologies," said Jim Cramer and the Action Alerts PLUS team, which holds Marvell in its portfolio.
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Once the deal closes, Marvell shareholders will own about 83% of the combined company and Inphi stockholders will own the rest.
The transaction is expected to close by the second half of 2021.
Marvell also disclosed Thursday that it expects third-quarter revenue in the range of $750 million, plus or minus 2%.