Marvell to Acquire Lumentum in $115 Billion All-Stock Deal to Build AI Connectivity Leader

Marvell Technology and Lumentum have agreed to combine in an all-stock transaction valued at an implied enterprise value of $115 billion for Lumentum, creating what the companies describe as a category leader in AI connectivity spanning electrical and optical technologies.

The deal comes as AI infrastructure reaches an architectural inflection point, with rapidly growing bandwidth requirements and the physical limitations of copper-based connectivity accelerating the shift toward optical technologies. As AI systems scale into increasingly complex architectures, particularly scale-up and scale-in domains, the industry is moving away from discrete, modular components toward highly integrated optical solutions that demand closer co-design of electrical and optical technologies to deliver greater bandwidth, performance and energy efficiency.

Under the terms of the definitive agreement, which was unanimously approved by both boards, Lumentum stockholders will receive a fixed exchange ratio of 4.500 shares of Marvell common stock for each Lumentum share they own. The consideration implies approximately $1,132 per Lumentum share, a premium of roughly 23.9% over the company's unaffected closing price on October 28, 2026, the last trading day before market speculation about a potential transaction began. Upon closing, existing Marvell stockholders will own about 67% of the combined company on a fully diluted basis, while Lumentum stockholders will hold approximately 33%.

The combination joins Marvell's strengths in electrical and optical interconnect, network switching, custom XPU and XPU attach, and advanced semiconductor technologies with Lumentum's expertise in high-performance lasers, optical transceivers, optical circuit switching and specialized compound semiconductor manufacturing, including indium phosphide process technologies. The companies expect the combined portfolio to span leading-edge CMOS, silicon photonics, compound semiconductors, advanced packaging and manufacturing, enabling deeper integration and co-design across the electrical and optical signal chain for connectivity solutions ranging from distributed data centers to connections within advanced semiconductor packages.

Marvell Chairman and CEO Matt Murphy framed the transaction as a generational opportunity, saying that the companies that move first to help define the shift toward optical connectivity will set the standard for decades to come. Lumentum President and CEO Michael Hurlston said the combination positions the company to capitalize on a $550 billion market opportunity, adding that surging AI data traffic requires rapid hardware innovation and that the combined company will address customers' complete interconnect needs across scale-across and scale-out today and scale-up and scale-in domains in the future.

The companies expect the transaction to expand their total addressable market to $550 billion, enhance long-term revenue growth and non-GAAP gross and operating margin profiles, and provide line of sight to more than $1 billion in annual run-rate cost synergies. The deal is also expected to be accretive to Marvell's non-GAAP earnings per share in the first year after closing. Following completion, Murphy will continue as chairman and CEO of the combined company, and three Lumentum directors, including Hurlston, will join Marvell's board.

The transaction is expected to close in the first half of calendar year 2028, subject to approval by both companies' stockholders, receipt of regulatory approvals and other customary closing conditions. Qatalyst Partners is serving as lead financial advisor to Marvell, with J.P. Morgan Securities and Goldman Sachs & Co. also advising, while Citigroup Global Markets and Evercore are serving as financial advisors to Lumentum.