Tech & AI
Marvell Agrees $115 Billion All-Stock Deal for Optical Supplier Lumentum
The offer values Lumentum at about $1,132 a share, a 23.9% premium, as chipmakers race to own the optical links inside AI data centres.
HedgeWeekly Tech & AI Desk ·
Marvell Technology said on Monday it will buy Lumentum Holdings in an all-stock transaction with an implied enterprise value of about $115 billion. Lumentum shareholders will receive 4.5 Marvell shares for each of their own, which the companies put at roughly $1,132 a share and a premium of about 23.9% to Lumentum's unaffected close on October 28.
After completion, Marvell holders would own about 67% of the combined group and Lumentum holders about 33%. Matt Murphy stays chairman and chief executive, and three Lumentum directors, including its chief executive Michael Hurlston, join a seven-member Marvell board. Closing is targeted for the first half of 2028 and needs shareholder and regulatory approval. Marvell expects more than $1 billion of annual cost savings and a boost to adjusted earnings per share in the first year.
Lumentum makes lasers, optical transceivers (modules that turn electrical signals into light and back) and optical circuit switches, which steer light signals without converting them. Marvell supplies chips that link and switch data inside AI clusters, and says combining the two addresses a $550 billion market. Per TheStreet's market report, Lumentum shares fell 10.34% and Marvell 5.31% later in the session after early gains.
Why it matters: the deal is one of the largest tech takeovers on record and a bet that light, rather than copper wiring, will carry more traffic as AI clusters grow. For investors it concentrates optical exposure in one stock, puts a large share issue into Marvell's capital structure, and leaves a roughly two-year wait for approvals. Watch regulatory reviews, rival optical suppliers such as Coherent and Ciena, and whether customers of either company react to the combination.