U.S. chipmaker Marvell Technology Group said on Monday it would buy rival Cavium Inc in a deal valued at about $6 billion as it seeks to expand its networking equipment business.

The two companies have signed a definitive agreement, unanimously approved by the boards of directors of both companies, under which Marvell will acquire all outstanding shares of Cavium common stock in exchange for consideration of $40.00 per share in cash and 2.1757 Marvell common shares for each Cavium share. Upon completion of the transaction, Marvell strengthen its position in the market of infrastructure solutions with approximately $3.4 billion in annual revenue.

The transaction combines Marvell's portfolio of HDD and SSD storage controllers, networking solutions and wireless connectivity products with Cavium's portfolio of multi-core processing, networking communications, storage connectivity and security solutions.

Marvell CEO Matt Murphy will lead the combined company, with Cavium co-founder and CEO Syed Ali serving as a strategic adviser and board member.

"This is an exciting combination of two very complementary companies that together equal more than the sum of their parts," said Matt Murphy.

Cavium Inc. stockholders are expected to own about 25 percent of the combined company.

The transaction is expected to close in mid-calendar 2018.

The deal could create a rival to Intel and other major computer chip producers.