Analysts back logic of Marvell's $115 billion Lumentum deal, flag premium
LITE•Analysts said Marvell's $115 billion all-stock deal for Lumentum, including debt, could strengthen their position in AI connectivity and optical networking, while Morningstar said Marvell is paying an excessive premium.
1. Strategic rationale
Melius Research said the deal could make the combined company a more strategic partner to Nvidia CEO Jensen Huang and hyperscalers as optics move inside the rack. Oppenheimer described the combination as a leading AI connectivity pure play, bringing together Marvell's digital signal processors, transimpedance amplifiers, silicon photonics and switches with Lumentum's lasers, modulators and photodiodes.
2. Premium concerns
Jefferies said the deal is aimed mainly at strengthening Marvell and Lumentum in scale-up and scale-in networking for GPUs and other accelerated processors, while creating cross-selling and co-design opportunities. Morningstar said the deal makes strategic sense, especially for integrating optical chips and lasers into future co-packaged optics roadmaps, but viewed the premium as excessive.
