Marvell Technology has agreed to acquire Lumentum Holdings in an all stock transaction with an implied enterprise value of $115 billion, in one of the largest semiconductor deals on record. The agreement, announced on 2 November, would combine Marvell’s custom chips and networking equipment with Lumentum’s lasers and optical components, creating a supplier built around the connections inside artificial intelligence data centres.
Under the terms, each Lumentum share will convert into 4.5 Marvell shares, worth about $1,132 per share on the reference prices used at announcement. That represents a premium of about 23.9 percent to Lumentum’s closing price on 28 October, the last trading day before reports of deal talks surfaced. Existing Marvell shareholders would own about 67 percent of the combined company, with Lumentum shareholders owning about 33 percent.
The transaction is expected to close in the first half of calendar 2028, subject to approval by both sets of shareholders and by regulators. Both boards have approved the agreement unanimously, according to reports. Marvell chairman and chief executive Matt Murphy would continue to lead the combined company, and three Lumentum directors, including Lumentum chief executive Michael Hurlston, would join its board.
Why optics now matter
The strategic case rests on a shift in how data centres move information. As AI systems grow, the links between processors, servers and switches must carry ever larger volumes of data, and copper connections face growing limits on speed and energy use. Optical links, which carry data as light, are presented by the companies as the answer, and the combined group would sell electrical and optical connectivity together.
Marvell chief executive Matt Murphy has described the moment as a generational shift toward optical connectivity in AI infrastructure. The move also sharpens a contest in custom AI chips, where rivals are racing to offer a fuller stack in one relationship.
Lumentum reported its fiscal first quarter results alongside the announcement, with revenue of $1.26 billion, up from $533.8 million a year earlier, and guided second quarter revenue to between $1.575 billion and $1.625 billion. Management said it sees a path to more than $1 billion in annual run rate cost synergies, and expects the deal to add to Marvell’s adjusted earnings per share in the first year after closing.
A long road to closing
The long timetable is itself part of the story. Because the consideration is entirely stock at a fixed exchange ratio, the dollar value will move with Marvell’s share price until closing, so the $115 billion headline is a snapshot, not a fixed cash sum. Markets did not greet the announcement warmly, with shares in both companies falling on Monday, and Nvidia’s $2 billion March investments in each company show how central Nvidia AI chips have become to data centre building.
