Mentioned:
MRVL -6.71% LITE -10.76%

Marvell Technology wants to capture the opportunity in optics for artificial intelligence. Which is exactly why they’re buying Lumentum.

What’s happening:

  • Marvell Technology (NASDAQ: MRVL) has entered into a definitive agreement to acquire Lumentum (NASDAQ: LITE) in an all stock deal

By the numbers:

  • Marvell Technology will issue 4.5 shares for every 1 share of Lumentum
  • Lumentum will own roughly 33% of the combined company following the successful completion of the acquisition

Why it matters:

  • This is the single largest acquisition that Marvell Technology has ever done

Going deeper:

  • Lumentum is one of the largest producers of indium-phosphide lasers used in artificial intelligence data centres and has publicly stated that some of their indium-phosphide products are effectively sold out for the next three years
  • Marvell Technology and Lumentum are expected to generate more than $1B USD in annual cost synergies as a combined company and together brought in roughly $11B USD in revenue in their last fiscal year