Marvell to acquire Lumentum in $115 billion deal to dominate AI connectivity

Marvell Technology Chairman and CEO Matt Murphy said the chipmaker’s landmark $115 billion acquisition of Lumentum is a “once-in-a-generation” opportunity to unite two of the most dominant companies in the AI ​​boom and create a “category leader.”

Appearing alongside Lumentum CEO Michael Hurlston on “The Claman Countdown,” Murphy detailed the companies’ record merger on Monday, predicting the transaction will solidify Marvell’s position at the forefront of AI connectivity.

“It’s very rare that you can find two companies of the caliber of Lumentum and Marvell, number one in their respective fields, that find a moment in time where you can combine and create a leader in a new category,” he told presenter Liz Claman.

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“This AI connectivity will have as many consequences as… the calculation category, or the memory category, the fab category and the IP license category.”

Murphy’s comments follow news of Marvell’s agreement to acquire Lumentum in a historic $115 billion transaction, marking the largest merger between two publicly traded companies. The deal will bring together two AI giants, with electrical and optical expertise, to meet the connectivity requirements of next-generation AI infrastructure.

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“Both companies are performing phenomenally well. And what we’re seeing, Liz, is a multiplier effect, where we’ll do much better together in two years than if we were alone,” Hurlston predicted.

Under the terms of the all-stock deal, Lumentum shareholders will receive 4.5 shares of Marvell common stock for each share owned, according to Marvell’s announcement.

“This is truly a historic day for both companies,” Murphy said. “We’re essentially combining the best-in-class leader in semiconductor AI connectivity technology with the leader in photonics. And that’s something that’s never been done before.”

Matt Murphy (right), chairman and CEO of Marvell Technology, appeared alongside Lumentum CEO Michael Hurlston (left) on “The Claman Countdown” on Monday. (Left (Takaaki Iwabu/Bloomberg via Getty Images), Right (Lam Yik Fei/Bloomberg via Getty Images) / Getty Images)

Marvell designs chips and artificial intelligence technologies that power data centers, while Lumentum designs lasers and other optical components that use light to transmit data between chips and servers.

Murphy said Lumentum and Marvell, both based in Northern California, have a “shared vision” and detailed how he believes the two technology companies will work better together than apart.

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“Together, with the additional opportunities we see with each other, there is an opportunity to truly outperform as a combined company,” said Marvell CEO.

Murphy, who said the merger has received “tremendous support” from hyperscalers, told FOX Business he expects “significant” revenue synergies and other benefits once the companies combine.

AI chip giant Nvidia is a strategic investor in both Lumentum, which has a market value of around $76 billion, and Marvell, with a market value of around $172 billion.

The Marvell-Lumentum deal drew “super positive” comments from Nvidia CEO Jensen Huang, Hurlston said. (Getty)

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Hurlston told FOX Business that Murphy discussed the potential acquisition of Lumentum with Nvidia CEO Jensen Huang early in the process, adding that Nvidia’s reaction had been “super positive.”

“Nvidia invested in Marvell, Nvidia invested in Lumentum. We think we can actually bring a lot more product to Nvidia, a lot faster with this combination,” Hurlston said.