NXP to Buy Marvell Wi-Fi Tech Unit in $1.76 Billion Deal

NXP to Buy Marvell Wi-Fi Tech Unit in $1.76 Billion Deal
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NXP agreed to buy the Wi-Fi connectivity business of Marvell Technology Group in a deal valued at $1.76 billion, according to Bloomberg. The all-cash acquisition includes Marvell’s Wi-Fi and Bluetooth technology and related assets, and will allow the automotive industry’s biggest chip supplier to offer customers a broader range of options to connect devices to the internet.

The Marvell unit generated about $300 million in revenue in 2019, and Netherlands-based NXP said it expects to double that by 2022. The deal should close by the first quarter of 2020, the companies said. "We think it’s another important foundation in our total solutions for customers: having the connectivity to go with the processing and security," NXP CEO Rick Clemmer said in an interview.

Marvell’s unit is more valuable to NXP because customers have been urging Clemmer to add connectivity to his current products, the CEO said. NXP had been trying to develop the short-range connection chips itself, but decided acquiring the capability would be quicker. For U.S.-based Marvell, the deal should result in enhanced margins after closing, the company said in a statement. “This transaction yields a premium valuation and substantially higher economic return for Marvell shareholders,“ it said.