Chinese regulators on Thursday removed the last major roadblock to chipmaker Marvell Technology Group (
MRVL
) acquiring Cavium (
CAVM
).
Marvell said China's State Administration for Market Regulation has approved the merger transaction, which is now expected to close in July. Marvell announced the $6 billion deal on Nov. 20. The merger remains subject to customary closing conditions.
The deal will combine Marvell's portfolio of storage drive controllers, networking systems and wireless connectivity products with Cavium's portfolio of multicore processing, networking communications, storage connectivity and security products.
Marvell shares jumped 8.2% to 21.77 on the
stock market today
. Cavium stock surged 9.8% to 87.22.
The combination of Marvell and Cavium will create a "formidable powerhouse in networking," Cowen analyst Karl Ackerman said in a report Thursday. The deal will expand Marvell's presence in data centers by giving it high-end networking products, he said.
Ackerman reiterated his outperform rating on Marvell stock with a price target of 29.
Qualcomm-NXP Deal Still Pending
Meanwhile, China has yet to approve Qualcomm's (
QCOM
) $44 billion purchase of NXP Semiconductors (
NXPI
). Qualcomm announced that acquisition in October 2016. The deal has received antitrust clearance from eight of the nine required government regulatory bodies around the world, with only China's Ministry of Commerce remaining.
The Qualcomm-NXP deal has been held up by trade disputes between the U.S. and China, as well as Chinese concerns that the merger could harm domestic companies.
The semiconductor sector has been performing poorly this month.
The Philadelphia Semiconductor Index, known as SOX, tumbled below its 200-day moving average on Wednesday. Except for a few days two months ago, the chip index hasn't been below that level in two years.
The SOX rebounded on Thursday, climbing 0.8% and ending the day above its 200-day line.
Original link：
https://www.investors.com/news/technology/china-approves-marvell-acquisition/
