Marvell to Buy Lumentum in $115 Billion All-Stock AI Optics Deal

Marvell Technology and Lumentum said on Monday that they had signed a definitive agreement for Marvell to acquire Lumentum in an all-stock transaction, with Lumentum shareholders receiving 4.5 Marvell shares for each Lumentum share they own. The deal implies an enterprise value of $115 billion for Lumentum, or about $1,132 a share, a premium of roughly 23.9% based on each company's closing share price on October 28, the last trading day before market speculation about a deal began. Reuters put the equity value at $102.54 billion.

The deal combines the electrical and optical sides of the networking that links AI chips inside data centers. Marvell brings electrical and optical interconnect, network switching and custom chip technology, while Lumentum adds high-performance lasers, optical transceivers, optical circuit switching and compound semiconductor manufacturing.

AI infrastructure is undergoing a fundamental architectural shift toward optical connectivity,

Marvell Chief Executive Matt Murphy said.

After closing, Marvell shareholders will own about 67% of the combined company and Lumentum shareholders about 33%. Murphy will remain chairman and CEO, and three Lumentum directors, including CEO Michael Hurlston, will join Marvell's seven-member board.

The headline value is already out of date. Because Lumentum shareholders receive a fixed number of Marvell shares, the deal's value moves with Marvell's stock. Since talks were first reported in late October, Lumentum's shares have fallen about 8% and Marvell's about 22%, amid a chip selloff that accelerated after Intel's weak forecast, Reuters reported. Marvell's shares rose 2.8% in premarket trading on Monday, while trading in Lumentum was halted.

The companies said the combination would expand their total addressable market to $550 billion, and that they see a path to more than $1 billion in annual run-rate cost synergies, with the deal adding to Marvell's non-GAAP earnings per share in its first year. Those are the companies' own estimates.

The deal is subject to approval by both companies' shareholders, regulatory approvals and other customary conditions. The companies did not say which regulators must approve it, whether there is a breakup fee, how much of the cost savings would come from job cuts, or which customers the combined company serves.

Nvidia invested $2 billion each in Marvell and Lumentum earlier this year. In August, Marvell signed a deal to supply chips that work alongside Google's AI processors, worth up to $120 billion in sales through fiscal 2033. The acquisition is Marvell's largest since its $10 billion purchase of Inphi in 2021.