Nvidia’s Huang blessed Marvell-Lumentum deal, report says

Marvell Technology ↘ 12.72% CEO Matthew Murphy and Lumentum ↘ 18.59% CEO Michael Hurlston called Nvidia ↘ 1.26% chief Jensen Huang before they announced their merger, and he gave the deal his blessing, Bloomberg reported, citing people familiar with the matter. The equity value of the deal is nearly $103 billion. The report shows how closely the two suppliers tied the deal to their biggest strategic partner. Nvidia invested $2 billion in each company earlier this year.bloomberg.com+1

Nvidia's "super positive" reaction

Hurlston told Fox Business that Murphy raised the idea with Huang early in the process and that Nvidia's reaction had 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. Murphy called the deal "a double down on supporting Nvidia, who is the ecosystem leader in this area," in remarks to CNBC reported by Capital Brief. He also pushed back on concerns about Nvidia's circular dealmaking, in which it invests in companies it does business with.foxbusiness.com+1

The companies had planned to announce the deal alongside Lumentum's earnings on Thursday, November 5. They moved the announcement up after news of the talks leaked, Bloomberg reported.finance.yahoo.com

Deal terms

Marvell announced on Monday, November 2, that Lumentum stockholders will receive 4.5 Marvell shares for each Lumentum share. That gives the deal an implied enterprise value of $115 billion, or about $1,132 per share, a premium of roughly 23.9% to the unaffected October 28 close. Reuters put the equity value at $102.54 billion. Lumentum holders will own about 33% of the combined company. The deal is expected to close in the first half of 2028, pending shareholder and regulatory approvals. Murphy will stay on as chairman and CEO, and Hurlston will join the Marvell board.investor.marvell.com+2

The merger brings together Marvell's custom chips and Lumentum's lasers and optical components, which use light to move data between chips and servers. Bloomberg called it the second-largest tech deal ever.finance.yahoo.com

Market reaction

Investors were not convinced. Both stocks fell sharply on the day of the announcement, with Marvell down more than 10% and Lumentum down about 15%. Reuters described the deal as a costly bet that helps Marvell take on its larger rival Broadcom ↘ 1.18% in the race for AI spending. Marvell's shares hit a record in June after Huang called it the next "trillion-dollar company."finance.yahoo.com+1