Marvell agrees to buy Lumentum for $115 billion in all-stock deal

The terms, in the companies' words: "Lumentum stockholders will receive a fixed exchange ratio of 4.500 shares of Marvell common stock for each share of Lumentum common stock they own." The companies said that works out to about $1,132 per Lumentum share, a premium of about 23.9% based on closing prices on Oct. 28, the last trading day before reports of talks. After closing, Marvell shareholders would own about 67% of the combined company and Lumentum shareholders about 33%. Marvell CEO Matt Murphy stays chairman and CEO, and three Lumentum directors, including CEO Michael Hurlston, join Marvell's seven-member board.

The case for the deal: The companies say the combination expands their total addressable market to $550 billion, gives them a path to more than $1 billion a year in cost savings, and would add to Marvell's adjusted earnings per share in the first year after closing. Lumentum could also benefit from a proposed U.S. ban on new Chinese optical transceivers, Reuters reported, which could steer demand toward U.S. suppliers.

The case for caution: Investors have been nervous. Since talks were first reported in late October, Lumentum shares have fallen about 8% and Marvell shares about 22%, Reuters said, during a wider chip selloff after Intel's weak forecast. Because Lumentum holders are paid in Marvell stock, the deal's value moves with Marvell's share price. The deal is a bet that AI spending by big tech companies stays high, Reuters noted, and closing is still more than a year away.

Timeline: 2021, Marvell buys Inphi for $10 billion, its largest deal until now. February 2026, Marvell closes its $3.5 billion purchase of Celestial AI, another optical-connection company. Earlier in 2026, Nvidia invests $2 billion each in Marvell and Lumentum. August 2026, Marvell signs a deal to supply chips that sit alongside Google's AI processors, worth up to $120 billion in sales through fiscal 2033. Late October, reports of talks surface. Nov. 2, the deal is announced.

What's still unknown: Whether regulators in the U.S. and abroad clear the deal, and whether both companies' shareholders vote for it. The companies expect to close in the first half of 2028. Marvell also said Monday that preliminary revenue for its fiscal third quarter came in line with its earlier guidance.

Deal terms, the $550 billion market estimate and the synergy target come from the companies' joint announcement and are company projections. Share-price moves and market value figures are from Reuters. The hero is a 2011 file photo of Marvell's Santa Clara offices.