Marvell Technology is in advanced talks to acquire Lumentum, a data-center optics maker with a market value of approximately $83 billion, according to Bloomberg4. A deal could be announced as soon as next week3.
Lumentum stock rose about 11% in after-hours trading on the news, while Marvell shares fell more than 8%2.
Lumentum sells optical components to network and data-center customers. AI workloads are driving data centers to move far more data between chips, servers, and racks, and optical components serve as the physical layer that keeps that traffic flowing. Acquiring Lumentum would extend Marvell's AI infrastructure portfolio beyond its custom chips and networking silicon.
Marvell held roughly $3.92 billion in cash and cash equivalents as of its most recent quarter. Bernstein said a deal of this scale likely cannot be funded with cash alone, pointing to some combination of new share issuance or additional debt. Integration of products, teams, and supply chains would also need to move quickly enough to deliver the expected benefits.
Lumentum is scheduled to report fiscal first-quarter earnings on November 5.
ANALYSIS At an approximately $83 billion market value for Lumentum, the transaction would rank among the largest semiconductor-adjacent acquisitions and would test Marvell's balance sheet and capital-markets access at a time when its own stock is under pressure from the initial market reaction.