Marvell agrees to buy Lumentum in $115 billion all-stock AI connectivity deal

Marvell and Lumentum announced a definitive agreement on November 2 for Marvell to acquire Lumentum entirely in stock. Each Lumentum share would receive 4.5 Marvell shares, a fixed exchange ratio. The implied enterprise value is $115 billion, a measure that includes debt. The companies have agreed to the transaction; the acquisition has yet to close.^[1][2]

Marvell designs chips, while Lumentum supplies lasers and optical components. The acquisition would expand Marvell's optical-connectivity business for AI data centers—the technology that uses light signals to move data between equipment.^[2][3][4]

Bringing chips and optical components under one company could help the businesses coordinate product development and offer data-center customers a more complete data-transfer system. Successful integration could let the combined supplier capture more of customers' connectivity budgets; that depends on product performance and purchasing decisions.^[2][4]

Paying with shares passes the cost through ownership: existing Marvell shareholders would reportedly own about two-thirds of the combined company. Marvell expects the deal to increase adjusted earnings per share, which exclude certain items, in the first year after closing; that remains its forecast. The fixed exchange ratio also means a fall in Marvell's share price reduces the market value of the shares Lumentum investors would receive.^[3][1]

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