Marvell in Advanced Talks to Acquire Lumentum; MRVL Falls 12%, LITE Rises 5%

Marvell Technology (MRVL) is in advanced negotiations to acquire optical components maker Lumentum (LITE), with a deal potentially announced as soon as next week, according to foreign media reports. Lumentum shares rose about 5% in early Thursday trading while Marvell plunged roughly 12%, breaking below its 50-day moving average, as investors weighed the cost of a large acquisition. Terms and payment structure were not disclosed. Lumentum, based in San Jose, California, supplies semiconductor laser chips, laser subassemblies, wavelength management systems, optical modules and optical circuit switches for cloud, AI, telecom and industrial markets — key components in AI data center interconnect architectures. The potential deal extends Marvell's strategy of acquiring optical interconnect technology. The company late last year announced a roughly $3.25 billion upfront acquisition of Celestial AI for optical links between AI processors. Marvell also partners with Amazon (AMZN) and Alphabet (GOOGL) on custom AI chips. Financing remains a concern: Marvell held about $3.92 billion in cash and equivalents last quarter versus Lumentum's roughly $78.5 billion market value as of Wednesday's close, suggesting sizable debt or equity issuance. Lumentum reports fiscal first-quarter results on November 5.