Marvell Technology Inc. agreed to buy Lumentum Holdings Inc. in an all-stock deal that puts an implied enterprise value of $115 billion on the optical-components maker, one of the largest technology acquisitions on record and a big bet that the AI data-center boom will keep demand for high-speed connections strong for years.
The agreement, signed Sunday and announced Monday, ends a week of speculation after talks between the two companies surfaced in late October. Lumentum shareholders will receive a fixed 4.5 Marvell shares for each share they own. Based on closing prices on Oct. 28, the last trading day before the talks became public, that equaled about $1,132 a Lumentum share, a premium of roughly 24%.
A bet on light over copper
Marvell designs custom chips, networking switches and the electrical and optical interconnects that link processors inside data centers. Lumentum makes the lasers, optical transceivers and optical circuit switches that move data as light, and runs its own indium phosphide chip factories. The companies argue that as AI clusters grow, copper wiring is hitting physical limits and customers want electrical and optical parts designed together rather than bought piecemeal.
The combined company says it will address a market worth about $550 billion, expects more than $1 billion a year in cost savings over time and projects the deal will add to Marvell’s adjusted earnings per share in its first year after closing. Nvidia Corp. invested $2 billion in each company earlier this year.
Investors balk at the price
Shareholders on both sides sold. Marvell fell 12.7% to $171.41 on Monday and Lumentum dropped 18.6% to $684.40 as chip stocks broadly slid. Because the exchange ratio is fixed, the value Lumentum holders will receive moves with Marvell’s stock: at Monday’s close, 4.5 Marvell shares were worth about $771, well below the headline figure.
Marvell holders will own about 67% of the combined business and Lumentum holders about 33%. Matt Murphy will remain chairman and chief executive, and three Lumentum directors, including Chief Executive Michael Hurlston, will join Marvell’s seven-member board. Both boards approved the deal unanimously. It needs shareholder votes at both companies and regulatory clearances, and is expected to close in the first half of 2028.
Qatalyst Partners was lead financial adviser to Marvell, with J.P. Morgan and Goldman Sachs also advising, and Wilson Sonsini Goodrich & Rosati as legal counsel. Citigroup and Evercore advised Lumentum, with Davis Polk & Wardwell as legal counsel.
