The buyer has been stated to make payments of about $40 in cash including 2.1757 common Marvell shares for each share of Cavium, according to a statement that was released on Monday. Marvell also has plans to use about 1.75 billion dollars in debt financing so as to fund the transaction. The shares owned by Cavium had risen to a record high on Monday, while gains were also made by Marvell.

The primary business that Marvell run is in the chips that direct hard disk drives, a market that is no longer thriving as it used to with the emergence of new technology that is taken over the storage of data. Cavium primarily makes processors used in networking and is among the companies that aims to employ the technology by ARM Holdings Plc. to enter into the market of microprocessor servers. The move is quite ambitious as Intel Corp, the most extensive chip maker in the world, grossly dominates the sector with a near 100 percent share.

Two Companies to be joined together

The deal that was made was a bit expensive but entirely necessary to help the two companies compete hopefully with the giants that dominate the industry of the semiconductors, including Intel, Broadcom Ltd., Qualcomm Inc., and others. An analyst that works with StifelNicolaus& Co., Kevin Cassidy had shared in a note. The savings in cost could add 10 percent to the total annual profit of the company, he stated.

The getting of San Jose, Cavium is the largest deal for Matthew J. Murphy who is the Chief Executive Officer of Marvell, who assumed the role after scandals in the accounting of the company had led to the resignation of the leader before him. “This is a quite interesting combination of two companies that complement each other a lot, and together they are more than the sum of the parts each of them owns,” Murphy shared in a statement. Marvell is Bermuda based and is operated from Santa Clara in California.