Marvell agrees to buy Lumentum for $115B to bet on optical AI networking

Lumentum stockholders will receive a fixed 4.500 Marvell shares for each Lumentum share they own. The companies put that at about $1,132 per Lumentum share, a premium of roughly 23.9% to the unaffected closing prices on October 28, the last trading day before reports of a possible deal[1]. Because the ratio is fixed and there is no cash, the final value will move with Marvell's share price[4].

After closing, Marvell stockholders will own about 67% of the combined company and Lumentum stockholders about 33%[1]. Marvell's investor presentation puts the combined enterprise value at more than about $275 billion[2]. Both boards approved the deal unanimously, and it is expected to close in the first half of 2028, subject to stockholder and regulatory approvals[1].

The companies frame the deal around one shift. As AI clusters grow, they say, bandwidth needs and the physical limits of copper wiring are pushing the industry toward optical links, and toward electrical and optical parts designed together rather than bought as separate modules[1].

Marvell brings electrical and optical interconnect, network switching and custom AI chips. Lumentum brings high-performance lasers, optical transceivers, optical circuit switching and compound semiconductor manufacturing, including indium phosphide[1]. The pitch is a single supplier for connections at every distance, from links between data centers down to links inside a chip package[1].

"AI infrastructure is undergoing a fundamental architectural shift toward optical connectivity, creating an opportunity that comes along once in a generation," Marvell CEO Matt Murphy said[1].

The companies say the deal expands their combined addressable market to $550 billion, gives line of sight to more than $1 billion a year in run-rate cost synergies, mostly in cost of goods, and should add to Marvell's non-GAAP earnings per share in the first year after closing[1][2].

Murphy will remain chairman and CEO. Three Lumentum directors, including CEO Michael Hurlston, will join Marvell's seven-member board[1].

Networking has become one of the tightest bottlenecks in building AI clusters, and this deal puts lasers, transceivers and the chips that drive them under one roof. It also has a long road ahead: with closing not expected until 2028, regulators will have plenty of time to examine what Axios calls the largest merger ever between public tech companies[1][3].