Marvell Technology agreed on 2 November to acquire Lumentum Holdings in an all-stock deal with an implied enterprise value of $115 billion, StreetInsider reported, citing the companies’ joint announcement. The definitive agreement moves the proposed combination of Marvell’s AI networking business and Lumentum’s optical components beyond the advanced talks reported in late October.
Key points
- Lumentum shareholders would receive 4.500 Marvell shares per share, implying approximately $1,132 per Lumentum share.
- Marvell shareholders would own approximately 67% of the combined company and Lumentum shareholders approximately 33%.
- The companies project more than $1 billion in annual run-rate cost savings and expect to close in the first half of 2028.
Marvell offers 4.500 shares for each Lumentum share
The exchange ratio implies approximately $1,132 for each Lumentum share, according to the terms reported by StreetInsider. It represents a premium of approximately 23.9% using the companies’ unaffected closing share prices on 28 October, the last trading day before speculation about a transaction began. Lumentum investors would receive Marvell shares rather than cash, making the value they receive dependent on Marvell’s share price at closing.
Existing Marvell shareholders would hold approximately 67% of the combined company on a fully diluted basis after the transaction, while Lumentum shareholders would hold approximately 33%. The boards of both companies approved the agreement unanimously. Matt Murphy would remain chairman and chief executive of the combined company, and three Lumentum directors, including its chief executive Michael Hurlston, would join Marvell’s board.
The signed agreement follows earlier AI Affairs reporting on Marvell’s advanced talks to buy Lumentum. Those talks concerned a supplier of the lasers and optical components used to move data through AI data centres. The new terms set the share exchange and the proposed ownership of the combined company.
Lumentum’s optical demand and factory investment
Lumentum’s optical components were sold out through early 2029, Barchart reported on 31 October. Hurlston said the company could not meet roughly 70% of demand for certain products through 2027. Those figures concern supply before the acquisition was announced and form part of the operating business Marvell has agreed to buy.
In its fiscal fourth quarter, Lumentum recorded revenue of $1.006 billion, up 109.3% from a year earlier. Components revenue rose 102.7% to $649.4 million, while systems revenue increased 122.6% to $356.9 million. Adjusted gross margin reached 50.4%, compared with 37.8% a year earlier, and adjusted operating margin was 36.6%, against 15%.
Lumentum also recorded a $7.16 billion GAAP net loss after a $7.8 billion non-cash debt-extinguishment charge, Barchart reported. Adjusted earnings per share were $3.23, up from $0.88. The loss and the adjusted figures give different measures of the same quarter’s results.
Marvell acquired Celestial AI in February 2026, gaining its Photonic Fabric technology for connecting AI processors. Lumentum supplies lasers and other optical components used in such links, and the two companies demonstrated optical circuit-switching technology earlier in 2026. Lumentum bought a 240,000-square-foot plant in Greensboro, North Carolina, in March to make indium-phosphide lasers for large AI data centres.
More than $1 billion in projected savings
Marvell and Lumentum project more than $1 billion in annual run-rate cost savings from the combination. They also expect the deal to increase Marvell’s non-GAAP earnings per share in the first year after closing. Those are company projections rather than results from the businesses operating together.
Alongside the acquisition announcement, Marvell reported preliminary fiscal third-quarter 2027 revenue consistent with its previous guidance. It narrowed the expected range around the unchanged midpoint to plus or minus 2%, from plus or minus 5%, StreetInsider reported. Lumentum separately released its fiscal first-quarter 2027 results.
Marvell and Lumentum expect to close the transaction in the first half of calendar year 2028, subject to approval by shareholders of both companies, regulatory clearances and other customary closing conditions.
