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BUZZ-Infineon gains in early trade after Marvell's deal

Reuters
Apr 08
BUZZ-Infineon gains in early trade after Marvell's deal

** Infineon's IFXGn.DE shares rise around 4% in early Frankfurt trade after the chipmaker said on Monday it would buy Marvell Technology's MRVL.O automotive ethernet business for $2.5 billion in cash

** "Should be a good fit strategically. Nice margin contribution," a local trader says

** The automotive ethernet business is expected to generate revenue between $225 mln-$250 mln in 2025, with a gross margin of nearly 60%

** Stifel notes that the implied multiple is high at about 10 times sales in 2025 and the deal adds to Infineon's net debt position

** The broker points out, though, that this "strategic acquisition" will strengthen the company's Nr. 1 position in auto semis further

** Infineon's stock has fallen 17% since April 2 close

(Reporting by Paolo Laudani)

((Paolo.laudani@thomsonreuters.com))

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