Marvell Technology is based in Bermuda but run from headquarters in Santa Clara, CA. (Photographer:... [+] David Paul Morris/Bloomberg) Marvell Technology has agreed to buy rival chipmaker Cavium for $6 billion in a cash-and-stock deal, the companies said on Monday. The deal comes at a time of rapid consolidation in the semiconductor industry and is expected to help Marvell expand beyond the chips it makes for storage devices. Under the terms of the deal, Marvell will pay $40 per share in cash and 2.1757 of its shares for each Cavium share. Following the transaction, Cavium shareholders will own about 25% of the combined company. Shares of Cavium jumped 8% in morning trading, while shares of Marvell rose 3%. "This is an exciting combination of two very complementary companies that together equal more than the sum of their parts," said Marvell CEO Matt Murphy in a statement. "This combination expands and diversifies our revenue base and end markets, and enables us to deliver a broader set of differentiated solutions to our customers." The combined company will have $3.4 billion in annual revenue and a breadth of products to serve customers in the cloud data center, enterprise and service provider markets. The deal is also expected to expedite product development and lead to cost savings. Murphy will lead the combined company, while Cavium co-founder and CEO Syed Ali will serve as a strategic adviser and board member. Marvell has come under pressure from activist investor Starboard Value, which took a stake in the chipmaker last year and led to the removal of the husband and wife who co-founded and ran the company for two decades. There have been a flurry of deals among chipmakers, with Qualcomm rejecting an unsolicited $130 billion bid from Broadcom last week, saying that the price was too low. Qualcomm is itself in the process of purchasing NXP Semiconductors for roughly $38 billion to expand its reach into automotive chips. Broadcom also recently merged with Avago in a $37 billion deal and is trying to complete a $5.5 billion merger with Brocade. The deal has been unanimously approved by the boards of directors of both companies and is expected to close in the middle of 2018. It is still subject to regulatory approval and other customary closing conditions. Marvell said it plans to fund the deal with a combination of cash on hand from the combined companies and $1.75 billion in debt financing.
Bermuda - based Marvell Technology will acquire California chip manufacturer Cavium in a cash - and - shares deal worth $ 6bn . " This combination expands and expands our revenue base and end markets , " said Marvell & Matt Murphy . The combined companies will be led by Murphy , with Cavium co - founder and CEO ben Ali retained as strategic adviser and board member . The deal represents the latest activity in the chip manufacturing sector , following Qualcomm 's rejection of an unsolicited $ 500 bid from Broadcom . The deal has been approved by both boards of directors and is likely to complete in the middle of 2018 .