Marvell to buy Lumentum in all-stock deal
Marvell Technology has announced an all-stock acquisition of optical components maker Lumentum, valued at $115 billion. The deal aims to integrate semiconductor and optical technologies to meet the surging infrastructure demands of artificial intelligence.
Why it matters
This merger represents a major consolidation in the AI hardware supply chain, signaling the critical importance of optical interconnects in scaling future AI data centers.
Marvell Technology 's deal for optical components maker Lumentum will create an "enormous" opportunity to address growing connectivity demands from the artificial intelligence infrastructure buildout, Lumentum CEO Michael Hurlston told CNBC on Monday.
"You need scale-up technology that needs semiconductors and optical working seamlessly together," Marvell CEO Matt Murphy told CNBC's "Squawk on the Street." "We are going to create a new category of company here."
Since the tie-up is a fixed-ratio deal with no cash, the value will depend on the price of Marvell shares. The company said the transaction has an implied enterprise value of $115 billion for Lumentum, in a release.
Marvell shares slumped 13% in trading Monday, while Lumentum's stock sank nearly 19%. But both stocks have been huge winners in the artificial intelligence boom, with Marvell more than doubling in the past year, prior to Monday's sell-off, and Lumentum quadrupling over that stretch.
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