Marvell hands Google a $12.2bn share option in a custom-chip deal
Marvell Technology has agreed to give Google the right to buy up to $12.2 billion of its shares. In return, Google will buy its custom chips. The chipmaker set out the deal in a regulatory filing on Wednesday. Its stock jumped as much as 14 percent on the news.
The warrant lets Google buy 58,970,907 Marvell shares at $206.58 each, CNBC reported. That is worth about $12.2 billion if fully exercised. The right is not automatic. Nearly 1.4 million of the shares vest in the first year, according to Bloomberg. The rest come in tranches tied to every $500 million of chips Google buys.
The purchasing targets run through Marvell’s 2033 fiscal year. If Google hits them, the tie-up could bring Marvell roughly $120 billion in custom-chip sales over that period, Reuters reported. It could also make Google the company’s fifth-largest investor.
The mechanics tie the stake to spending. Google...
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