US semiconductor group Marvell has agreed to buy data centre component maker Lumentum in a $115 billion all-stock transaction, which would be the largest-ever M&A deal involving two publicly listed tech companies. The merger marks a major bet on the durability of the AI boom amid Wall Street jitters over tech spending. Marvell and Lumentum, both Silicon Valley companies, said the combined entity would become a leader in AI connectivity as the industry races to handle soaring computing power demands.
Matt Murphy, Marvell chief executive, stated that AI infrastructure is undergoing a fundamental architectural shift toward optical connectivity, calling the opportunity once-in-a-generation. Marvell provides hyperscalers like Microsoft and Amazon with specialised AI accelerator chips, offering an alternative to Nvidia. Lumentum produces optical technology for data centres and telecom networks, including lasers manufactured in Silicon Valley.
Michael Hurlston, Lumentum chief executive, emphasized the commitment to expanding domestic manufacturing to reinforce Americas role in global technology leadership. Both companies work with Nvidia, which invested $2 billion in each via separate deals in March to push into optical technologies. The merger comes as investors grow wary whether record data centre spending will pay off, with tech stocks tumbling recently.
Despite sector volatility, Marvell shares have more than doubled in the past 12 months, while Lumentum stock increased 10-fold over two years. The deal values Lumentum shareholders at a 24 percent premium, offering 4.5 Marvell shares for each Lumentum share. Analyst Karl Ackerman of BNP Paribas Equity Research noted the tie-up would allow Marvell to best address the high-margin optical component landscape for the next decade and boost its ability to compete with larger rival Broadcom.
Source: Financial Times Companies · Summarized by HeadlinesBriefing