Marvell Technology agreed on November 2 to acquire Lumentum in an all-stock deal with an enterprise value of $115 billion, including debt. The California companies said the proposed combination would bring together semiconductor and optical technologies to meet growing connectivity demands in artificial intelligence infrastructure.
The companies said rising bandwidth needs and limits on copper connections are driving a shift toward optical links. Marvell supplies custom chips and networking technology, while Lumentum makes lasers and optical components. They intend to integrate those capabilities more closely to improve performance and energy efficiency across AI systems.
Under the agreement, Lumentum investors would receive 4.5 Marvell shares for each share held and own about 33% of the combined company. The announcement valued each Lumentum share at about $1,132, a 23.9% premium based on unaffected October 28 closing prices. Reuters put the equity value at $102.54 billion, distinct from the larger figure including debt.
Reuters reported that the acquisition would strengthen Marvell's challenge to Broadcom in AI data-center hardware. Nvidia invested $2 billion in each of the two companies earlier this year. The deal comes as investors question whether heavy AI infrastructure spending can be sustained amid pressure on margins and cash flow, the news agency reported.
The companies said both boards had unanimously approved the agreement. Marvell chief executive Matt Murphy would continue as chairman and CEO, while three Lumentum directors, including its chief executive Michael Hurlston, would join Marvell's board. The proposed structure would put chip design and optical manufacturing expertise under the same leadership.
Completion is expected in the first half of 2028, subject to shareholder votes, regulatory approvals and other conditions, the companies said. Until those steps are completed, the combination remains a proposal. Their announcement cautioned that integration difficulties and changes in customer spending could affect the anticipated benefits.
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