Marvell Technology will reportedly buy rival chipmaker Cavium for $6 million (CAVM, MRVL)

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Marvell Technology has agreed to buy Cavium for about $6 billion as it tries to expand beyond semiconductors that control hard disk drives.

Marvell will pay Cavium shareholders $40 per share in cash, and 2.1757 Marvell common shares for each unit of Cavium stock, according to a release. This represents a total deal value of roughly $6 billion, and Cavium shareholders will own about 25% of the combined company.

"This is an exciting combination of two very complementary companies that together equal more than the sum of their parts," Marvell president and CEO Matt Murphy said in the release. "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."

Cavium's stock soared 7.4% in pre-market trading on the news, while Marvell shares climbed 1%.

The deal is part of Marvell's attempt to revamp its business after a scandal that led to the removal of its founders under pressure from Starboard Value, an activist investor.

The acquisition is just the latest sign of consolidation in the semiconductor industry. Earlier this month, Broadcom offered to purchase Qualcomm for more than $100 billion in what would be the biggest tech deal of all time. While Qualcomm rejected the approach, Broadcom is expected to pursue a proxy battle.

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