Marvell Technology has agreed to acquire optical components maker Lumentum in an all-stock transaction valued at approximately $115 billion.
The deal will combine Marvell’s semiconductor and data center networking technology with Lumentum’s optical components, aiming to strengthen their position in the growing AI infrastructure market.
Under the agreement, Lumentum shareholders will receive 4.5 shares of Marvell common stock for each Lumentum share they own. The terms value Lumentum at approximately $1,132 per share, representing a 23.9% premium to its last unaffected stock price.
Marvell makes networking chips and technology for data center and telecommunications infrastructure. Lumentum makes optical components, such as lasers, photodetectors, optical amplifiers and optical circuit switches, for transmitting data over fiber-optic networks.
Marvell specializes in networking technologies and chips used in data centers and telecommunications infrastructure. Lumentum provides components for optical engineering, such as lasers, optical amplifiers, photodetectors, and optical circuit switches used to transmit information through fiber-optic networks.
This acquisition will likely enhance Marvell’s capabilities in the area of optical connectivity which is becoming crucially important as AI data centers require quicker and more effective connections between machines and chips. Lumentum’s technology also includes co-packaged optics devices that facilitate connectivity in data centers while minimizing power consumption.
The companies expect the combination to support the development of next-generation AI connectivity products and provide greater control over the supply chain. Marvell estimates that the deal will expand its total addressable market to $550 billion.
Marvell anticipates that the acquisition will be concluded in the initial half of 2028, provided that all the necessary approvals and closing conditions are met. The leading position of the merged entity will be held by Marvell’s CEO Matt Murphy, with Lumentum’s CEO Michael Hurlston joining the board of directors along with other two directors from Lumentum.
Marvell expects the transaction to become accretive to adjusted earnings per share within one year of closing. The company also aims to achieve more than $1 billion in annual run-rate cost savings and accelerate revenue growth over time.
Following the announcement, Marvell and Lumentum shares declined, reflecting investor concerns about the scale of the transaction and the sustainability of AI infrastructure growth.
