Infineon To Buy Marvell's Automotive Ethernet Business In $2.5 Bln All-Cash Deal

Infineon Technologies

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(RTTNews) - German semiconductor company Infineon Technologies AG (IFNNY) said on Tuesday that it has signed a definitive agreement to purchase Marvell Technology Inc.'s (MRVL) Automotive Ethernet business. The entire transaction is valued at $2.5 billion in cash.

The deal is subject to standard closing conditions, including regulatory approvals, and is expected to be completed by 2025-end.

Following the deal closure, Marvell's Automotive Ethernet business will become part of Infineon's Automotive division.

Infineon said that Ethernet is an important technology for enabling low-latency, high-bandwidth communication, which is essential for software-defined vehicles. Its potential also extends to related fields, such as humanoid robotics, the company added.

Marvell's Automotive Ethernet business is expected to generate revenue of $225 million to $250 million in the 2025 calendar year with a gross margin of around 60%.

According to Infineon, the acquisition will strengthen its presence in the U.S., including substantial Research & Development efforts.

The company expects to make use of its existing liquidity and take on additional debt to finance the all-cash acquisition of the Ethernet business. The firm has secured acquisition financing from banks.

Commenting on the deal, Jochen Hanebeck, CEO, Infineon, said, "We will leverage this highly complementary Ethernet technology by combining it with our existing, broad product portfolio to provide our customers with even more comprehensive, leading solutions for software-defined vehicles. The transaction will support our profitable growth strategy going forward, including new opportunities in the field of physical AI such as humanoid robots."

On the XETRA in Germany, the stock is trading down 0.90 percent at 24.92 euros.