Marvell Technology has agreed to acquire Lumentum in an all-stock deal that gives the optical components maker an implied enterprise value of $115 billion, the two companies announced on 2 November.
The terms. Lumentum shareholders will receive 4.5 Marvell shares for each share they own, worth about $1,132 a share. The companies put that at a premium of about 23.9% to the 28 October closing prices, the last trading day before speculation about a deal began. After closing, Marvell shareholders will own about 67% of the combined company and Lumentum shareholders about 33%. Both boards approved the deal unanimously. Marvell’s Matt Murphy stays on as chairman and CEO, and three Lumentum directors, including CEO Michael Hurlston, will join Marvell’s board.
The companies say they expect more than $1 billion in annual run-rate cost savings and that the deal should add to Marvell’s adjusted (non-GAAP) earnings per share in the first year after closing. Completion is expected in the first half of 2028, subject to shareholder and regulatory approval.
What each brings. Marvell designs custom AI chips and the interconnect and networking chips that link processors together. Lumentum makes lasers and other optical components that move large volumes of data between servers. Marvell is already a customer for Lumentum’s lasers. The companies say the combined business will address a market of $550 billion.
Why it matters. Inside large AI clusters, the links between chips are starting to shift from copper wires to optical connections, which carry data as light and can move more of it with less power. Murphy called this shift an opportunity that comes “once in a generation”. By owning both the chips and the optics, Marvell is positioning itself to compete more directly with its larger rival Broadcom for AI data centre spending.
Investors were cautious. Marvell shares fell 13% on 29 October after reports of the talks emerged, and both companies’ shares fell on the day of the announcement. The deal also faces a long timeline and regulatory review.
Context. Nvidia invested $2 billion in Marvell in March as part of a wider partnership, and separately took a $2 billion stake in Lumentum.