Marvell was in advanced talks to buy Nvidia-backed Lumentum, an optical technology supplier for data centers, Bloomberg reported. The discussions between the companies were still ongoing, according to the report on its Bloomberg Technology programme published Oct. 29.
A purchase would expand Marvell's optical technology business, an area the company has sought to build under Matt Murphy. The purchase price, financing arrangements and timetable remained open, with those details of a potential transaction still unresolved.
Lumentum supplies optical components used in data centers and chips. Its products include lasers and optical transceivers, devices that convert electronic signals into light to carry data between servers. Those transceivers allow data to move from one server to another in the form of light.
Those components support the connections inside data centers running chips from companies including Nvidia. They also form part of the technology behind the custom chips Marvell is developing, linking Lumentum's products to that part of Marvell's business.
Lumentum's chief executive said the company's output was sold out through 2029 and that it could meet only about 70% of its backlog of orders because of demand. The remarks did not specify when it could meet the remaining orders, leaving the timing for filling that part of the backlog unclear.
The prospective purchase would bring that optical component business into Marvell as both companies serve demand for data center technology. The discussions had not produced an announced agreement, and a purchase remained the subject of talks.
Marvell held less than $4 billion in cash on its balance sheet, according to Bloomberg. No financing package was identified, leaving open how much cash or stock the company might use for a purchase. The account did not establish how those sources of payment might be combined.
The account raised the possibility that Marvell could use its shares to help pay for Lumentum. Neither a proposed stock component nor a funding commitment was disclosed.
Marvell shares were down 12% during the broadcast. Lumentum shares were also shown rising, although the automatic transcript did not clearly establish the size of that gain.
The broadcast also described a broader Nasdaq selloff, leaving the extent to which Marvell's decline reflected the takeover talks unresolved. Neither company gave a statement in the supplied remarks confirming terms or a decision to proceed.
