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Marvell agrees to buy laser maker Lumentum in a $115 billion all-stock deal

The chipmaker agreed to acquire Lumentum, a maker of lasers and optical parts for data centers, in an all-stock deal expected to close in the first half of 2028.

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Why it matters: It's a $115 billion bet that AI data centers will move further toward optics. The deal needs antitrust and other approvals, with closing expected in the first half of 2028.

For information only, not investment advice. Prices delayed.

Tickers: MRVL, LITE

A slim metal optical transceiver module with a yellow fiber-optic cable plugged into it lies on a gray steel lab bench beside a fiber-cleaning kit and coils of fiber cord.

Marvell Technology ($MRVL) agreed to acquire Lumentum ($LITE) in an all-stock deal that gives Lumentum an implied enterprise value of $115 billion, the companies said Monday. It's a bet that AI data centers will increasingly rely on optical connections as copper hits its physical limits.

If you haven't heard of Lumentum, it makes high-performance lasers, optical transceivers and optical circuit switches, the parts that move data as light between servers. The companies argue that AI's growing bandwidth needs and the physical limits of copper are pushing the industry toward optics.

Lumentum holders will get 4.500 Marvell shares for each share they own. The companies value that at about $1,132 a share, a 23.9% premium to Lumentum's price on Oct. 28, before talk of a deal started. Marvell holders will own about 67% of the combined company. The companies expect more than $1 billion in annual cost savings and say the deal will add to Marvell's adjusted earnings per share in the first year.

Don't expect it to close quickly. The target is the first half of 2028, pending shareholder votes, U.S. antitrust clearance and other approvals. Under the merger agreement in Marvell's filing, Marvell would owe Lumentum $3.2 billion if regulators block the deal, and $5.8 billion if it walks away for a better offer.

Marvell CEO Matt Murphy will run the combined company. “AI infrastructure is undergoing a fundamental architectural shift toward optical connectivity, creating an opportunity that comes along once in a generation,” he said.

Sources

  1. Marvell and Lumentum to combine (Exhibit 99.1), Marvell Technology and Lumentum (SEC EDGAR)
  2. Marvell Technology Form 8-K: merger agreement, Marvell Technology (SEC EDGAR)

Tags: mergers-acquisitions · semiconductors · ai