Intel

(INTC) - Get Report

agreed to sell a division that makes processors for handheld devices to

Marvell

(MRVL) - Get Report

for $600 million.

The price is expected to be all cash, although Intel has an option to receive up to $100 million of it in Marvell common stock. Intel's communication and application processor business employs about 1,400 people, the "vast majority" of which will be transferred to Marvell. The deal should close within five months, the companies said.

Intel's operation manufactures processors used in

Research In Motion's

(RIMM)

BlackBerry 8700, the

Palm

(PALM)

Treo and the

Motorola

(MOT)

Q, among other things.

"In recent years, Intel has made significant progress and won major customers with this business," Intel said. "The communications and application processor segments continue to present an attractive market opportunity, and we believe this business and its assets are an optimal fit for Marvell. We have a long history of working closely with Marvell and believe it has the ability to grow the business while maintaining customer commitments."

Intel said the divestiture will let it focus investment on its core businesses, including low-power Intel architecture-based processors and emerging technologies for mobile computing, including Wi-Fi and WiMAX broadband wireless technologies.