Marvell agrees to buy Lumentum in a $115 billion all-stock deal to win the race for AI data-centre optics
Marvell will pay about $1,132 a share in stock for laser maker Lumentum, a 23.9% premium, in a $115bn deal for AI data-centre optics closing in 2028.
At a glance
- Marvell Technology agreed on Monday, November 2, to buy Lumentum in an all-stock deal with an implied enterprise value of $115 billion, including debt.
- Lumentum shareholders get 4.5 Marvell shares for each share — about $1,132, a 23.9% premium to the price on October 28, before talks became public.
- Marvell investors will own about 67% of the combined company and Lumentum's about 33%; Marvell expects more than $1 billion a year in cost savings.
- It is Marvell's biggest takeover by far, ten times the $10 billion it paid for Inphi in 2021, and needs shareholder and regulatory approval before closing in the first half of 2028.
Marvell Technology has agreed to buy Lumentum, a maker of lasers and optical parts for data centres, in an all-stock deal that values the company at $115 billion including debt. The two US chip companies announced the takeover on Monday, November 2. It is one of the largest semiconductor deals ever agreed, and it rests on one idea: the next bottleneck in artificial intelligence is moving data between chips, not the chips themselves.
Lumentum shareholders will get 4.5 Marvell shares for every share they own. That is worth about $1,132 a share, 23.9% more than Lumentum's closing price on October 28, the last trading day before talk of a deal became public. The equity value is about $102.5 billion. Both boards approved the deal unanimously.
The terms in one table
| Detail | |
|---|---|
| Enterprise value | about $115 billion (including debt) |
| Equity value | about $102.5 billion |
| Price per Lumentum share | about $1,132, in Marvell stock |
| Exchange ratio | 4.5 Marvell shares per Lumentum share |
| Premium | 23.9% to the October 28 close |
| Ownership after closing | Marvell holders about 67%, Lumentum holders about 33% |
| Expected cost savings | more than $1 billion a year |
| Expected closing | first half of 2028 |
| Approvals needed | both companies' shareholders and regulators |
Marvell says the deal will add to its adjusted earnings per share in the first year after closing and lift its margins over time. Matt Murphy stays on as chairman and chief executive. Three Lumentum directors, including chief executive Michael Hurlston, will join Marvell's board, which now has seven members.
Why light, not just silicon
Large AI systems link thousands of processors, and the copper wires that connect them struggle with the distances and data speeds involved. More of that traffic now runs on light, through lasers and optical transceivers — the parts Lumentum makes. The company also builds optical circuit switches and makes its own indium phosphide chips, the material used for many high-speed lasers.
Marvell designs custom AI processors for cloud companies, along with the networking and interconnect chips that sit next to them. Put together, the two say they can sell into a market worth $550 billion. Murphy called it an opportunity "that comes along once in a generation". Hurlston said the combined company would be uniquely placed to go after that $550 billion market.
The deal makes Marvell a much bigger rival to Broadcom and Nvidia in AI networking, and to optical makers such as Coherent and China's Zhongji Innolight. A proposed US ban on new Chinese optical transceivers could push more American orders towards domestic suppliers, which would help a combined Marvell–Lumentum.
A bet on its biggest customers
Marvell has grown fast on the back of cloud computing. Its annual revenue rose from about $3 billion in fiscal 2021 to $8.2 billion in the year to January 2026. In August it signed an agreement with Google covering chip sales of up to $120 billion through fiscal 2033, with Google getting the right to buy a $12.2 billion stake. In February it completed a $3.5 billion purchase of Celestial AI, a start-up working on optical links.
Nvidia invested $2 billion in each of the two companies earlier this year.
The Lumentum deal is more than ten times the size of Marvell's previous biggest purchase, the $10 billion takeover of Inphi in 2021. Marvell also said on Monday that its revenue for the quarter that ended on October 31 was in line with its guidance.
How the shares reacted
Marvell shares rose 2.8% before the market opened, while trading in Lumentum was halted around the announcement. Both had fallen since talks were first reported in late October — Marvell by about 22% and Lumentum by about 8% — during a wide sell-off in chip stocks after Intel's weak forecast. That sell-off is why the 23.9% premium is measured against the October 28 price, not Friday's close.
What could still stop it
The deal needs votes from both companies' shareholders and clearance from competition regulators. Marvell will file a registration statement with a joint proxy for the two votes. The long timeline, with closing not expected until the first half of 2028, suggests the companies expect a lengthy review in several countries — including China, where Marvell and Lumentum both sell and where large chip deals have stalled before.
For India, the deal matters beyond the stock market. Marvell runs some of its largest chip-design teams in Bengaluru, Hyderabad and Pune, and the new company's push into AI networking is likely to draw on that engineering base. The companies held a call with investors on Monday morning in New York and will publish full details in their merger filings in the coming weeks.
Questions people are asking
How much is Marvell paying for Lumentum?
The deal values Lumentum at about $115 billion including debt, or roughly $102.5 billion in equity. Lumentum shareholders will receive 4.5 Marvell shares per share, worth about $1,132 when the price was set.
When will the Marvell–Lumentum deal close?
The companies expect it to close in the first half of 2028, after votes by both sets of shareholders and approval from regulators.
