Monday, June 26, 2006

Marvell to Acquire Intel's Handheld Processor Business for $600 Million

Marvell Technology Group agreed to acquire Intel's communications and application processor business for $600 million in cash plus the assumption by certain liabilities. Intel has the option to take up to $100 million of the $600 million purchase price in Marvell common stock.

Intel's communications and application processor business develops and sells processors for handheld devices including smart phones and personal digital assistants. The business' processors, based on Intel XScale technology, include the Intel PXA9xx communications processor, codenamed "Hermon," which powers Research in Motion's (RIM) Blackberry 8700 device. The Intel PXA27x applications processor, codenamed "Bulverde," is used in the Palm Treo smart phone, the Motorola Q and other devices. The business is run by approximately 1,400 employees. It is expected that the vast majority of these employees will become employees of Marvell.

Marvell said the deal gives it a strong presence in the growing market segment for processors used in smart handheld devices.

Intel said the sale enable it to focus its investments on its core businesses, including high-performance, low-power Intel Architecture-based processors and emerging technologies for mobile computing, including Wi-Fi and WiMAX.

After the close of the transaction, Intel intends to continue manufacturing products currently sold by this business for handheld devices and embedded applications, and to manufacture products that are being designed into upcoming devices. This arrangement is expected to continue while Marvell arranges other manufacturing resources. Intel and Marvell do not anticipate disruptions in the supply of these products due to this planned sale.

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