Marvell to Acquire Lumentum in All-Stock Deal to Strengthen AI Connectivity

Marvell Technology has agreed to acquire optical components maker Lumentum in an all-stock transaction, a move CEO Matt Murphy described to CNBC as creating an "enormous" opportunity to meet rising connectivity demands from AI infrastructure buildout.

Murphy said the combined company would pair semiconductors and optical technology, telling CNBC's "Squawk on the Street" that the goal is to "create a new category of company here." Because the deal uses a fixed exchange ratio with no cash component, its value will track Marvell's share price; the company said the transaction carries an implied enterprise value of $115 billion for Lumentum.

Under the agreement, Lumentum shareholders will receive 4.5 Marvell shares for each Lumentum share. The deal is expected to close in the first half of 2028. Marvell shares fell 6% in Monday trading, while Lumentum's stock dropped 11%.

Marvell said the acquisition would combine electrical and optical technologies to address accelerating AI connectivity demands, as companies increasingly rely on optical connections to link chips used to run and train large language models. Murphy said the resulting solutions would be "highly sticky," adding that demand is "exploding" and "we don't see that changing anytime soon."

The takeover ranks among the most significant AI bets of 2026, even as questions persist about the long-term sustainability of infrastructure spending. It follows Marvell's multibillion-dollar deal this year for Celestial AI, a startup focused on optical interconnectivity technology.

Murphy also dismissed concerns about Nvidia's circular dealmaking, noting Nvidia has invested in both companies. "This is a double down on supporting Nvidia, who is the ecosystem leader in this area," he told CNBC, adding that bringing two key suppliers together should benefit that ecosystem. Marvell's market value has more than tripled over the past three years amid AI enthusiasm, while Lumentum's stock has more than doubled in 2026 alone.

Source: CNBC