Marvell agrees to buy Lumentum in $115 billion all-stock deal aimed at AI optical links

The terms of the deal

Marvell Technology has agreed to buy Lumentum in an all-stock transaction valued at $115 billion including debt, the two companies said in a joint statement on Monday, 2 November. Each Lumentum share converts into 4.5 Marvell shares, a package the companies put at about $1,132 per Lumentum share. That price is a 23.9% premium to Lumentum's closing price on 28 October, the last trading day before talks were first reported. Once the transaction closes, Marvell shareholders would hold about 67% of the combined company and Lumentum shareholders about 33%. The boards of both companies approved the agreement, which still needs shareholder and regulatory approval and is expected to close in the first half of 2028.

Valuation and market reaction

Reuters puts the equity value of the deal at $102.54bn, while the $115bn headline figure includes debt. Bloomberg data show the transaction is the largest of 2026 by equity value and the largest ever in global technology, excluding the SpaceX and xAI merger. Lumentum shares had gained 128% this year up to the close on Friday, 30 October, giving it a market value of about $76bn, while Marvell was valued at $172.2bn. Marvell's stock fell 13% after Bloomberg reported on 28 October that a deal was close. According to Reuters, Lumentum has dropped about 8% and Marvell about 22% since talks became public, amid a wider chip selloff that followed a weak forecast from Intel. On Monday Lumentum's shares were halted, while Marvell rose nearly 6% in premarket trading on Wall Street.

Deal value including debt115

Deal equity value102.54

Marvell market value172.2

Lumentum market value76

Deal value including debt

115 USD bn

Deal equity value

102.54 USD bn

Marvell market value

172.2 USD bn

Lumentum market value

76 USD bn

Data from the article text

Strategy behind the bet

Marvell designs custom AI chips and networking links for hyperscalers, and it supports Amazon in developing AI processors and networking components for its data centres. In August it signed a deal with Google to supply chips that sit alongside Google's AI processors, worth up to $120bn in sales through fiscal 2033, and the agreement gives Google the right to buy a $12.2bn stake. Nvidia invested $2bn in each company earlier this year. At its October investor day Marvell forecast fiscal 2031 sales of $70bn to $90bn, and it expects about $37.5bn of that to come from interconnect, a market it projects will grow 65% a year to $65bn by 2030. Lumentum expects revenue of $1.58bn to $1.63bn for the current quarter, a surprisingly high level, and it is among the possible beneficiaries of a planned import ban on Chinese networking components for data centres. Murphy framed the deal in these terms:

“AI infrastructure is undergoing a fundamental architectural shift toward optical connectivity, creating an opportunity that comes along once in a generation.”

Leadership and next steps

Matt Murphy will remain chairman and chief executive of the combined company. Three Lumentum directors, including chief executive Michael Hurlston, will join Marvell's seven-member board. Completion depends on approval from shareholders and regulators, and the companies expect the deal to close in the first half of 2028. Murphy described the goal of the combination as follows:

“We intend to help shape the next era of AI connectivity and create exceptional stockholder value.”

Analysts expect Marvell to post revenue of about $12bn in its current fiscal year 2026/2027, a level that would be four times its 2020/2021 result.