Marvell to buy Lumentum in $115 billion all-stock deal in bet on optical AI connectivity
Custom chipmaker Marvell Technology agreed to acquire Lumentum, a maker of lasers and optical components used in AI data centres, in an all-stock transaction valuing Lumentum at about $115 billion.
Marvell Technology on Monday, November 2, announced a definitive agreement to acquire optical-components maker Lumentum in an all-stock transaction with an implied enterprise value of $115 billion for Lumentum, one of the largest deals of the year.
Deal terms
Under the agreement, Lumentum stockholders will receive a fixed 4.5 Marvell shares for each Lumentum share they own. That represents about $1,132 per Lumentum share and a premium of roughly 23.9% to the companies' unaffected closing prices on October 28, the last trading day before market speculation about a deal began. After closing, Marvell stockholders are expected to own about 67% of the combined company and Lumentum stockholders about 33%.
According to Reuters, the deal carries an equity value of $102.54 billion and was unanimously approved by both boards. It is expected to close in the first half of calendar 2028, subject to shareholder and regulatory approvals. Marvell would pay a $3.2 billion fee if regulators block the transaction.
Why optics
Lumentum makes high-performance lasers and photonic components that move data through data centres as light rather than over copper. Demand for faster, more energy-efficient links between thousands of chips in AI clusters has made optical interconnect one of the tightest parts of the AI supply chain.
"AI infrastructure is undergoing a fundamental architectural shift toward optical connectivity, creating an opportunity that comes along once in a generation," said Marvell CEO Matt Murphy, who will remain chairman and CEO of the combined company.
Reuters said the deal strengthens Marvell's challenge to larger rival Broadcom, Google's long-time custom-chip partner. But it comes as investors question the sustainability of AI spending: Lumentum shares fell 6.5% and Marvell's 2.3% before the bell on Monday. Nvidia invested $2 billion each in Marvell and Lumentum earlier this year.
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