Marvell Technology has agreed to buy Lumentum in an all-stock deal that values the laser and optical-parts maker at $115 billion. Lumentum stockholders will get 4.5 Marvell shares for each share they own. Based on both stocks' closing prices on Oct. 28, the last trading day before talk of a deal began, that works out to about $1,132 a Lumentum share, a premium of roughly 23.9%. The two companies announced the agreement before the market opened Monday.
Both boards have signed off. Stockholders of both companies still have to vote, regulators have to approve, and the companies expect to close in the first half of 2028.
The bet is on AI data centers, which move enormous amounts of data between chips. Copper wiring is running into physical limits there, so more of that traffic is shifting to light. Lumentum makes the lasers, optical transceivers and optical circuit switches that carry it; Marvell designs the chips on the electrical side, including custom processors and network switches. Marvell chief executive Matt Murphy will run the combined company, and three Lumentum directors, among them CEO Michael Hurlston, will join Marvell's board. The companies expect more than $1 billion a year in cost savings and say the deal should lift Marvell's adjusted earnings per share in its first year.
Lumentum is growing fast. Its revenue for the quarter ended Sept. 26 was $1.26 billion, up 136.5% from $533.8 million a year earlier, according to results it filed with the SEC the same morning, and it forecast $1.575 billion to $1.625 billion for the current quarter. Hurlston said the company landed its second major order for near-packaged or co-packaged optics, backed by purchase commitments of more than $5 billion.
Marvell, for its part, said preliminary revenue for its fiscal third quarter is in line with its earlier guidance, and it narrowed that range to plus or minus 2%.
What stockholders should expect
The exchange ratio is fixed. That means the value Lumentum holders receive will move with Marvell's share price until the deal closes. Afterward, current Marvell stockholders will own about 67% of the company and Lumentum stockholders about 33%.
Nobody has to do anything yet. Marvell plans to file a registration statement with the SEC that includes a joint proxy statement, and the stockholder votes will follow.
