Marvell Technology (MRVL.US) announced on Thursday local time that its tender offer for artificial intelligence chip startup Celestial AI has received an Early Termination notice from the U.S. Federal Trade Commission (FTC). This development signifies that the significant merger has successfully passed the compliance review mandated by the Hart-Scott-Rodino Antitrust Improvements Act (HSR Act). By authorizing an early termination of the statutory waiting period, the regulator has indicated its determination that the transaction does not pose a substantial threat to competitive dynamics within the industry, thereby removing a major legal obstacle and allowing the parties to advance integration procedures ahead of the standard 30-day waiting period.
According to previously disclosed transaction details, Marvell Technology initiated the acquisition in early December 2025, with an initial consideration of approximately $3.25 billion, comprising $1 billion in cash and $2.25 billion in stock. Furthermore, the agreement includes an earn-out provision; if certain revenue targets are met, Marvell Technology will issue an additional 27.2 million shares to Celestial AI's equity holders.
The first revenue target requires Marvell Technology to achieve a cumulative revenue of at least $500 million by fiscal year 2029, which would trigger the payout of one-third of the additional shares. The remainder of the payout will occur if Celestial AI's cumulative revenue exceeds $2 billion by the end of Marvell's fiscal 2029. Should Celestial AI hit specific revenue milestones in FY2029, the total transaction valuation could potentially reach up to $5.5 billion.
A key asset underpinning this acquisition is Celestial AI's "Photonic Fabric" technology. This technology utilizes optical signals to replace traditional electrical signals, aiming to overcome the "memory wall" bottleneck in large-scale AI computing systems by providing an extremely high-bandwidth, ultra-low-latency solution for chip-to-chip interconnectivity.
Market analysis widely suggests that this acquisition allows Marvell Technology to fill a critical gap in its technology portfolio for photonic interconnects, significantly strengthening its competitive position in the market for next-generation accelerated computing infrastructure.
With the formal conclusion of the FTC's review, the merger is expected to complete all legal closing procedures within the first quarter of 2026, subject to customary closing conditions and regulatory approvals. Buoyed by this positive regulatory signal, Marvell Technology's secondary market stock price demonstrated resilience. On the day the news was announced, its share price experienced a modest increase, closing up 0.67% at $83.10.
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