Marvell to Buy Lumentum in $115B Bet on AI Connectivity
Marvell Technology has agreed to acquire Lumentum in an all-stock transaction with an implied enterprise value of $115 billion, betting that growing artificial intelligence workloads will accelerate demand for integrated optical connections across data centers.
Lumentum shareholders will receive 4.5 Marvell shares for each share they own. Based on the companies’ Oct. 28 closing prices, before transaction speculation began, the agreement valued Lumentum at approximately $1,132 a share, representing a 23.9% premium.
Existing Marvell shareholders are expected to own approximately 67% of the combined company on a fully diluted basis, while Lumentum shareholders would hold 33%.
The combination pairs Marvell’s networking, custom chips and electrical and optical interconnect technologies with Lumentum’s lasers, optical transceivers, optical circuit switches and specialized semiconductor manufacturing.
The companies said rising bandwidth requirements and copper connectivity’s physical limitations are driving demand for more closely integrated electrical and optical systems. They expect joint development to improve performance and energy efficiency while accelerating customers’ product launches.
“AI infrastructure is undergoing a fundamental architectural shift toward optical connectivity, creating an opportunity that comes along once in a generation,” said Matt Murphy, Marvell’s chairman and CEO.
The companies project more than $1 billion in annual run-rate cost synergies and expect the transaction to increase Marvell’s adjusted earnings per share in the first year after closing. They estimate the combined business would address a $550 billion market opportunity.
Murphy will remain chairman and CEO. Three Lumentum directors, including CEO Michael Hurlston, will join Marvell’s board.
Closing is expected in the first half of 2028.
Qatalyst Partners is serving as lead financial advisor and J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC are serving as financial advisors to Marvell. Wilson Sonsini Goodrich & Rosati is serving as legal advisor to Marvell, and FGS Global is serving as strategic communications advisor. Citigroup Global Markets Inc. and Evercore are serving as financial advisors to Lumentum, Davis Polk & Wardwell LLP is serving as legal advisor and Joele Frank, Wilkinson Brimmer Katcher is serving as strategic communications advisor.