Marvell Technology Agrees to Acquire Lumentum in $115 Billion Deal

Marvell Technology announced an agreement to acquire optical components manufacturer Lumentum Holdings in an all-stock transaction valued at approximately $115 billion, including debt. Under the terms of the agreement, Lumentum shareholders will receive 4.500 shares of Marvell common stock for each share they own, representing a valuation of about $1,132 per Lumentum share and a 24% premium over its closing price prior to initial speculation. Following the completion of the transaction, current Marvell shareholders will own roughly 67% of the combined company, while Lumentum holders will hold the remaining 33%.

The acquisition is designed to position Marvell as a comprehensive provider of artificial intelligence infrastructure. As data centers migrate from copper to optical connectivity to handle massive data volumes more efficiently, the combination will unite Marvell's custom silicon and networking chips with Lumentum's advanced lasers and optical interconnections. Marvell Chief Executive Officer Matt Murphy described the shift toward optical connectivity as a once-in-a-generation opportunity that will help shape the future of AI networking.

Both company boards unanimously approved the transaction, which is expected to close in the first half of calendar 2028, pending approval from regulators and stockholders of both companies. Executives from Marvell project that the merger will yield over $1 billion in annual run-rate cost synergies and expand their total addressable market to $550 billion. The deal is also expected to be accretive to non-GAAP earnings per share in the first year following its close.

Despite the strategic rationale, the announcement triggered a downward movement in the share prices of both companies amid investor concerns regarding equity dilution, valuation premiums, and the extended timeline for closing. Marvell shares fell following the market open, while Lumentum stock also retreated. Analysts noted that the multi-year integration period exposes the companies to potential regulatory hurdles, particularly in the United States and China, as well as broader macroeconomic and sector-wide volatility.

The transaction underscores the intense corporate competition to supply hardware for advanced data centers driven by artificial intelligence workloads. Both Marvell and Lumentum have previously attracted significant strategic investments from Nvidia, highlighting their critical roles in the expanding AI ecosystem. Lumentum recently reported strong financial results, posting quarterly revenue of $1.26 billion, which surpassed market expectations.

Marvell has experienced substantial growth in its data center division over the past decade, transforming the segment into its primary revenue driver. The impending acquisition of Lumentum represents Marvell's largest corporate purchase since its $10 billion acquisition of Inphi in 2021, and follows a recent expansion of custom processor partnerships with major technology firms such as Google and Amazon Web Services.