Marvell Technology will buy optical components maker Lumentum in an all-stock deal valued at about $115 billion, the companies announced on Monday, in one of the largest technology acquisitions ever agreed.
Marvell matters to the AI race because data centres now need faster links between racks of processors, and the deal joins Marvell’s chips and electrical connections with Lumentum’s lasers and optical parts, which move data using light.
Under the agreement, Lumentum shareholders will receive 4.5 Marvell shares for each Lumentum share they own, according to the companies. That exchange ratio implies a price of about $1,132 per Lumentum share, a premium of about 23.9 percent to Lumentum’s closing price on October 28, before reports of deal talks surfaced.
TechCrunch reported the $115 billion figure as an enterprise value including debt, with an equity value of about $80 billion. After the deal closes, existing Marvell shareholders will own about 67 percent of the combined company and Lumentum shareholders about 33 percent, on a fully diluted basis.
Both companies’ boards approved the agreement unanimously, the companies said. Marvell chairman and chief executive Matt Murphy will continue to lead the combined company, and three Lumentum directors, including chief executive Michael Hurlston, will join Marvell’s board.
Marvell said the combination would create a leader in connectivity for artificial intelligence data centres. The companies also said they see line of sight to more than $1 billion in annual run-rate cost savings, and expect the deal to add to Marvell’s adjusted earnings per share in the first year after closing.
Lumentum reported its own results alongside the announcement, with first-quarter revenue of $1.26 billion, slightly above market expectations, according to Stocktwits. Marvell put the combined addressable market for the merged business at $550 billion, a company estimate rather than an independent forecast.
Nvidia is a major shareholder in both companies, TechCrunch noted, and the New York Times reported that Nvidia invested $2 billion each in Lumentum and rival optical firm Coherent in March, alongside purchase commitments for their technology. The deal reflects a shift inside data centres from copper connections toward faster laser-based links close to individual AI chips, the Times reported.
Shares in both companies fell on Monday as chip stocks sold off, with Marvell closing down about 13 percent at $170.80, according to the Motley Fool. The fall shows investors are weighing dilution and integration risks even for a deal aimed at the centre of the AI boom.
What is confirmed is the agreement, its exchange ratio and the leadership plan. What is not yet settled is approval: the deal still needs support from both companies’ shareholders and clearance from regulators, and the companies expect it to close in the first half of calendar 2028. Because the exchange ratio is fixed, the final dollar value will move with Marvell’s share price until closing.
