A subsidiary of the Bermuda-based technology company Marvell Group has announced plans to buy Galileo Technology for $2.7 billion in stock.

Integrated circuit maker Marvell Technology Group Ltd. yesterday said it would buy Israeli semiconductor maker Galileo Technology Ltd. in a $2.7 billion stock swap, a deal that will allow Marvell to offer a complete package for the next generation of faster network data transmission.

Under the terms of the deal, Marvell, whose integrated circuits enable high-speed data storage and transmission, will swap 0.674 share of its stock for each share of Galileo. Marvell will issue a total of 32.9 million shares in the deal. Galileo will have 25 percent stake in the combined company.

Marvell Tech to buy Galileo in $2.7 billion deal The deal is expected to close in the 2001 first quarter and will be accounted for as a purchase. On a pro forma basis, excluding amortisation of goodwill and stock compensation expenses, the merger is expected to add to Marvell's earnings immediately upon closing.

The boards of both companies have unanimously approved the agreement, the companies said.

The value of the deal is based on Marvell's Monday closing stock price of $81-3 . Shares of Marvell began trading publicly on June 27.