Instead of focusing Marvell's business efforts exclusively on chips that control hard drive disks, Murphy has switched gears to add more offerings in data center and wireless communication technology.
"We look forward to working closely with the Marvell team to ensure a smooth transition and to start unlocking the significant opportunities that our combination creates", said Cavium Co-founder and Chief Executive Officer, Syed Ali.
Bermuda-based Marvell makes semiconductors for data-storage devices while California-based Cavium produces communications and networking chips.
"This is an exciting combination of two very complementary companies that together equal more than the sum of their parts", Murphy said.
Marvell is offering $40 per share in cash as well as 2.1757 of its own shares, based on its undisturbed share price prior to November 3.
Marvell intends to fund the acquisition from cash on hand from the combined companies and $1.75 billion in debt financing.
Cavium shareholders will own about 25% of the combined company. Earlier this month, chipmaker Qualcomm Inc rejected rival Broadcom Ltd's $103 billion takeover bid, one of the biggest ever in technology dealmaking, saying the offer undervalued the company and would face regulatory hurdles.
During the investigation, Starboard Value LP took a stake in Marvell and pushed for management changes and divestments, and in April 2016 Sutardja and his wife, President Weili Dai, who founded the company in 1995, stepped down. Cavium shares jumped 7.4 percent after Monday's open. Marvell's customers include Western Digital Corp., Toshiba Corp. and Samsung Electronics Co., according to Bloomberg supply chain analysis.
Goldman Sachs was the financial adviser to Marvell while Qatalyst Partners and JP Morgan Securities were the financial advisers to Cavium. The companies expect the deal to close in mid-2018.