Marvell in Advanced Talks to Acquire Lumentum, Bloomberg Reports; Marvell Shares Fall After Hours

MRVL is in advanced talks to buy LITE, the optical-component supplier whose lasers and transceivers sit inside AI data-center networks, according to a Bloomberg report published after the U.S. close on Oct. 28 that cited people familiar with the matter. The two sides have not signed a definitive agreement, and the price, payment method and timeline remain subject to change. A deal could be announced as soon as next week. Every outlet in this cluster relays that single Bloomberg report; neither company has commented.

The market's first verdict split along buyer and target lines. Lumentum rose about 9% in extended trading while Marvell fell more than 8%, roughly 9% by another account. No offer value has been disclosed. For scale, Lumentum carries a market value of about $83 billion against roughly $221 billion for Marvell, which makes this far larger than Marvell's $3.25 billion Celestial AI photonics deal. Marvell held about $3.92 billion in cash at its latest quarter, well short of an all-cash price, so stock or debt financing would likely be needed. Lumentum shares have surged 327% over the past year, and the company posted record fiscal fourth-quarter revenue of $1.01 billion, up 109%. Nvidia invested $2 billion in Lumentum earlier this year.

The strategic logic is vertical integration: pairing Marvell's custom silicon and electro-optics with Lumentum's lasers would reduce reliance on outside optical suppliers as AI clusters shift toward optical interconnects. Marvell raised its data-center market forecast to $94 billion by 2028 from $75 billion at its Oct. 6 investor day. Stifel reiterated its Buy rating and $370 price target on Marvell, saying the deal would initially dilute gross margin while staying within Marvell's 56% to 59% long-term range, would be immediately accretive to non-GAAP operating margin, and would require U.S. and Chinese regulatory approvals.

What to watch: whether a signed agreement arrives next week with a price and financing mix, how much new equity Marvell would issue, and how quickly regulators in Washington and Beijing move. Lumentum also sells into rival chip and systems vendors, so customer reaction to a Marvell-owned supplier is an open question.