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Marvell and Cavium Join Forces as Industry M&A Heats Up

We view the deal favorably for both companies’ shareholders.

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 Marvell Technology Group (MRVL) announced Nov. 20 that it will acquire  Cavium (CAVM) in a cash and stock deal that values the latter at roughly $6 billion. Marvell will pay Cavium shareholders $40 in cash and 2.1757 in Marvell shares for each share of Cavium.

We view the deal favorably as it allows Marvell to pivot away from its legacy storage business into the more attractive data center arena. The combined entity would boast an extensive product portfolio with 37% of revenue from networking and processing versus 46% from storage, based on the most recent completed quarter.

Abhinav Davuluri does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.