Marvell and Lumentum agree to combine in an all-stock AI connectivity deal

Marvell Technology and Lumentum have entered a definitive agreement for Marvell to acquire Lumentum in an all-stock transaction, aiming to create what the companies call a category leader in AI connectivity by combining Marvell's electrical and optical interconnect, switching and custom silicon with Lumentum's lasers, optical transceivers and optical circuit switching. Under the deal terms, Lumentum stockholders will receive a fixed exchange ratio of 4.500 shares of Marvell stock for each Lumentum share, implying an enterprise value of about $115 billion for Lumentum, or roughly $1,132 per share, a premium of about 23.9 percent over the unaffected closing price on October 28, 2026.

After closing, current Marvell stockholders are expected to own about 67 percent of the combined company and Lumentum stockholders about 33 percent, on a fully diluted basis. The companies say the combination expands their total addressable market to $550 billion and expect it to provide line of sight to more than $1 billion in annual run-rate cost synergies, while being accretive to Marvell's non-GAAP earnings per share in the first year after closing.

Matt Murphy will continue as Chairman and CEO of the combined company, and three members of Lumentum's board, including Lumentum CEO Michael Hurlston, will join Marvell's board. The deal, unanimously approved by both boards, is expected to close in the first half of calendar year 2028, subject to stockholder votes, regulatory approvals and other closing conditions.

Why it matters

It is a major consolidation between an electrical interconnect chipmaker and an optical components leader, reflecting how AI data center bandwidth demands are reshaping the supply chain.

Source: Marvell