Analysis

Acquisition to accelerate Ethernet technology leadership

7th May 2019
Lanna Cooper

 

Marvell and Aquantia have announced a definitive agreement, approved by the boards of directors of both companies, under which Marvell will acquire all outstanding shares of Aquantia common stock in exchange for consideration of $13.25 per share in cash.

The acquisition of Aquantia complements Marvell's portfolio of copper and optical physical layer product offerings and extends its position in the Multi-Gig 2.5G/5G/10G Ethernet segments. In particular, Aquantia's innovative Multi-gig automotive PHYs, coupled with Marvell's gigabit PHY and secure switch products, creates the broadest and most advanced range of high speed in-car networking solutions in the world. This unique combination accelerates Marvell's vision for the future of automotive networking with speeds necessary to enable level 4 and 5 autonomous driving.

As the automotive industry increasingly adopts Ethernet in-vehicle networks for mainstream models, the number of related ports is expected to grow dramatically at a 62% annualised growth trajectory, from 53 million in 2018 to 367 million by 2021.

"Our acquisition of Aquantia will fuel Marvell's leadership in the transformation of the in-car network to high speed Ethernet over the next decade," said Matt Murphy, President and CEO of Marvell.  "At the same time, Aquantia extends our reach in the rapidly emerging Multi-Gig segment of network infrastructure and creates a leading end-to-end Ethernet connectivity portfolio."

"Marvell and Aquantia share a vision where the network - whether in an autonomous vehicle, an enterprise application or in cloud infrastructure - can seamlessly power the data economy," said Faraj Aalaei, Chairman and CEO of Aquantia. "This is a fantastic opportunity as our customers will benefit from Marvell's global scale and expanding footprint in Multi-Gig network applications."

The transaction is expected to be immediately accretive to Marvell's non-GAAP earnings per share and generate significant annual run-rate synergies of $40m to be realised within 12 months after the transaction closes.

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