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

Marvell Technology has agreed to acquire optical networking specialist Lumentum in an all-stock transaction valued at approximately $115 billion in enterprise value, the companies announced on November 2. The deal is the largest in Marvell's history and positions the combined company as a dominant force in AI data-center connectivity, bringing together Marvell's custom AI chips, networking switches, and interconnect technology with Lumentum's lasers, optical transceivers, and optical circuit switching products.

Under the terms of the agreement, Lumentum shareholders will receive a fixed exchange ratio of 4.5 Marvell shares for each share of Lumentum common stock, implying a price of roughly $1,132 per share. That represents a 23.9% premium to Lumentum's unaffected closing price on October 28. Marvell shareholders will retain approximately 67% of the combined company, with Lumentum shareholders holding the remaining 33%. Marvell CEO Matt Murphy will lead the combined business.

The strategic rationale centers on the accelerating shift from copper to optical connectivity inside AI data centers, which demand faster data transfer, greater bandwidth, and improved power efficiency. Marvell says the combination expands its total addressable market to $550 billion. The companies project more than $1 billion in annual run-rate cost synergies and expect the deal to be accretive to Marvell's adjusted earnings per share in the first full year after closing. The transaction is expected to close in the first half of 2028, subject to shareholder and regulatory approvals.

The announcement comes after a brutal October for AI-related equities, with an estimated $3.46 trillion wiped from the sector during the month. Marvell itself fell 25.8% in October. Separately, Marvell reaffirmed the midpoint of its fiscal third-quarter revenue guidance while narrowing the range to plus or minus 2% from the prior plus or minus 5%. Lumentum had also just reported first-quarter earnings of $4.57 per share, beating estimates, as AI optics demand surged.