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

Marvell Technology (NASDAQ: MRVL) and Lumentum (NASDAQ: LITE) announced today, Monday, Nov. 2, that they have signed a definitive agreement for Marvell to buy Lumentum. The deal is all stock and carries an implied enterprise value of $115 billion.

Lumentum holders will get 4.500 Marvell shares for each Lumentum share. The companies put that at about $1,132 per share, a 23.9% premium to Lumentum's unaffected close on Oct. 28, the last trading day before deal speculation began. Reuters put the equity value at $102.54 billion.

After closing, current Marvell holders would own about 67% of the combined company and Lumentum holders about 33%, on a fully diluted basis. Both boards approved the deal unanimously.

What Marvell says it is buying

Marvell designs custom AI chips, networking silicon and optical interconnect parts. Lumentum makes lasers, optical transceivers, optical circuit switches and the compound-semiconductor manufacturing behind them.

CEO Matt Murphy called it "an opportunity that comes along once in a generation." He said AI infrastructure is shifting toward optical connectivity and that "the companies that move first and help define this transition will set the standard for decades to come."

The companies say the combined business would address a $550 billion total market. They claim "line of sight to more than $1 billion in annual run-rate cost synergies." They also expect the deal to add to Marvell's non-GAAP earnings per share in the first year after closing. Those are company projections, not results.

Governance and timing

Murphy stays chairman and CEO. Three Lumentum directors, including CEO Michael Hurlston, would join Marvell's seven-member board.

The deal is expected to close in the first half of 2028. That is roughly a year and a half out, and it still needs shareholder approvals and regulatory clearances.

Qatalyst Partners is lead financial adviser to Marvell, with J.P. Morgan and Goldman Sachs also advising. Citigroup and Evercore are advising Lumentum.

The numbers around the deal

Marvell also released preliminary third-quarter revenue in line with its prior outlook. In August it guided to $3.15 billion, plus or minus 5%. It kept the midpoint and narrowed the range to plus or minus 2%.

Lumentum reported first-quarter revenue of $1.26 billion, slightly above the $1.25 billion consensus estimate cited by Koyfin.

The fixed exchange ratio means the dollar value of the offer moves with Marvell's share price. The $1,132 figure rests on Oct. 28 prices. Since talks were first reported late last month, Lumentum shares have fallen about 8% and Marvell about 22%, as a broad chip selloff accelerated after Intel's weak forecast, according to Reuters.

Pre-market indications this morning differ by source. Reuters had Marvell up 2.8% and Lumentum halted. TradingView had Marvell up about 1%, off earlier gains, and Lumentum up as much as 2.5%. Regular trading does not open until 9:30 a.m. ET.

Where it fits in Marvell's AI push

Marvell's market value has climbed past $170 billion, helped by its custom-chip work for hyperscalers such as Amazon. Annual revenue rose from $3 billion in fiscal 2021 to $8.2 billion in fiscal 2026.

In August Marvell signed a deal to supply chips that sit alongside Google's AI processors, worth up to $120 billion in sales through fiscal 2033. It gives Google the right to buy a $12.2 billion stake.

Nvidia invested $2 billion each in Marvell and Lumentum earlier this year. Marvell also closed a $3.5 billion purchase of Celestial AI in February. The Lumentum deal is its largest since the $10 billion Inphi buyout in 2021.

The move also puts Marvell in sharper competition with Broadcom, long Google's main custom-chip partner and a supplier of a broader range of data-center hardware.

Lumentum competes with Coherent and China's Zhongji Innolight. Reuters notes it could benefit from a proposed U.S ban on new Chinese optical transceivers, which could push demand toward domestic suppliers. That ban is a proposal, not law.

The risk side

Before the announcement, 24/7 Wall St. flagged what a premium would cost Marvell. It pointed to $4.96 billion in existing debt, a $2 billion preferred raise and the Google warrant for up to 7% of shares. It also cited the integration of Celestial AI and XConn and Marvell's reliance on a handful of hyperscalers for data-center sales. Its verdict: disciplined terms would help the bull case, while "a stock-heavy premium would hurt it."

The terms are now out, and they are all stock. Marvell holders will give up a third of the company. The deal's success depends on Big Tech's AI spending continuing, which is the bet the companies themselves describe.

Murphy and Hurlston are scheduled to discuss the deal on CNBC TV at 9:15 a.m. ET today. The next hard checkpoints are the shareholder votes and the regulatory reviews that stand between this announcement and a 2028 closing.