(Nov 2): Marvell Technology Inc has reached a deal to buy data centre optics maker Lumentum Holdings Inc at an enterprise value of US$115 billion (RM466.4 billion), one of the biggest tech tie-ups ever, in a race to capitalise on the artificial intelligence (AI) boom.

The all-stock transaction will give Marvell shareholders 67% of the combined company, according to a statement confirming an earlier Bloomberg News report that the two Silicon Valley companies were nearing a pact. The deal is expected to close in the first half of 2028, the companies said.

On an equity basis, it’s the top M&A deal of the year and the largest ever in the global tech sector, excluding the SpaceX-xAI merger, data compiled by Bloomberg show. The transaction shows how AI is driving deals across almost all major sectors and regions, from chipmakers and other specialist tech suppliers, to data center operators and power utilities.

Lumentum shares fell as much as 12% in New York to US$740.10. Marvell declined as much as 7.3% to US$182.15. Heading into the announcement, Lumentum was valued at US$76 billion as of Friday. Marvell was valued at US$172.2 billion.

Lumentum makes lasers and other optical technology for moving enormous amounts of data at high speeds. That hardware underpins the AI boom, as it lets data centres and telecommunications firms move information between servers, facilities and other destinations. 

Marvell already purchases laser technology from Lumentum, and the larger company has been increasing its bets on optical and photonic technology for connecting data center gear. Earlier this year, Marvell purchased photonics maker Celestial AI.

Nvidia Corp announced an agreement to take a US$2 billion stake in Lumentum in March as part of a deal that included collaboration on photonics, which use light instead of traditional copper wiring to move data faster and more efficiently.

Marvell also works with Amazon.com Inc’s cloud unit and Microsoft Corp to help build custom AI chips. In August, the company struck a chip deal with Alphabet Inc’s Google to support Google’s tensor processing units.

Qatalyst Partners is serving as the lead financial adviser to Marvell, with Goldman Sachs Group Inc and JPMorgan Chase & Co also working with the company. Citigroup Inc and Evercore Inc are advising Lumentum. 

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