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Marvell Technology chairman and CEO Matt Murphy said the chipmaker’s historic $115 billion acquisition of Lumentum is a “once in a generation’ opportunity to unite two of the most dominating 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-breaking merger on Monday, predicting that the transaction will cement 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 that are number one in their respective areas that find a moment in time where you can combine and create a category leader in a new category,” he told anchor Liz Claman.
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“This AI connectivity is going to be as consequential as… the compute category, or the memory category, the fab category, and the IP licensing category.”
Murphy’s comments follow the announcement of Marvell’s agreement to acquire Lumentum in a landmark $115 billion transaction, marking the largest merger between two publicly traded companies. The deal will unite two massive AI enablers, equipped with electrical and optical expertise, to address connectivity requirements for next-generation AI infrastructure.
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“Both companies.are executing phenomenally well. And what we see, Liz, is a multiplying effect, where we’re gonna do much better together in two years than we would on a standalone basis,” Hurlston predicted.
Under the terms of the all-stock agreement, Lumentum shareholders will receive 4.5 shares of Marvell common stock for each share held, according to Marvell’s announcement.
“It’s really a historic day for the two companies,” Murphy said. “We’re putting together basically the best-in-class leader in AI connectivity technology for semiconductors with the leader in photonics. And it is something that hasn’t been done before.”
Marvell designs artificial intelligence chips and technology that powers 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 headquartered in Northern California, have a “shared vision” and detailed how he believes the two tech companies will work better together than apart.
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“Together, because of the additional opportunity we see with each other, there’s an opportunity to really outperform as a combined company,” the Marvell CEO said.
Murphy, who said the merger has received “tremendous support” from hyperscalers, told FOX Business that he expects “significant” revenue synergies and other benefits once the companies are joined together.
AI chip giant Nvidia is a strategic investor in both Lumentum, which has a market value of around $76 billion, and Marvell, with a value of roughly $172 billion.
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Hurlston told FOX Business that Murphy discussed the potential Lumentum acquisition with Nvidia CEO Jensen Huang early in the process, adding that reaction from Nvidia has been “super positive.”
“Nvidia is invested in Marvell, Nvidia is invested in Lumentum. We think we can actually bring a lot more product to bear to Nvidia a lot more quickly in this combination,” Hurlston said.
