Marvell plans to acquire Lumentum for $115 billion

Marvell Technology has agreed to acquire Lumentum for approximately $115 billion (€103 billion). Lumentum produces optoelectronic components and has recently benefited significantly from the construction of AI infrastructure. The deal was announced by both American companies; according to Bloomberg, Nvidia's CEO Jensen Huang has given it his "blessing." In March, Nvidia invested $2 billion in each company as key links in its supply chain.

What Marvell Gains

According to the companies' estimates, after the acquisition, Marvell's addressable market will grow to $550 billion. Founded in 1995, the company with a revenue of about $8 billion will be able to compete more strongly with Broadcom. By investing in Marvell in the spring, Nvidia was aiming not only for a stake in the company but also for custom chips and better compatibility of Marvell's components with its own equipment.

The deal will be paid entirely in stock: for each Lumentum share, its owners will receive 4.5 Marvell shares. It is expected to close in the first half of 2028, subject to shareholder and regulatory approval. Lumentum was little known until recent years, but the AI boom has sharply boosted its business. Marvell is betting that optoelectronics for AI data centers will only grow; for Nvidia, this is an important step in consolidating its supply chain, writes Bloomberg. Additionally, Lumentum could benefit from a potential US ban on importing Chinese equipment into AI data centers.

Market Reaction

Investors reacted skeptically to the enormous purchase price: on Monday, Marvell's shares fell by nearly 13%, and Lumentum's by almost 19%. "This is a huge risk, and investors are rightly questioning whether Marvell is paying too much and taking on too much at once," Reuters quotes Axel Rudolph, an analyst at IG Group.