Marvell to buy Lumentum in $115 billion AI deal

Marvell Technology has agreed to buy Lumentum in an all-stock deal that values the optical components maker at an implied enterprise value of $115 billion, including debt. The transaction, announced on November 2, 2026, assigns the deal an equity value of $102.54 billion, making it one of the largest technology combinations announced this year. The move is framed as a bet on the continued expansion of artificial intelligence data-center infrastructure, where high-speed optical connectivity is critical.

Under the terms of the agreement, Lumentum shareholders will receive 4.5 Marvell shares for each Lumentum share. This exchange ratio implies a value of about $1,132 per Lumentum share and represents a premium of about 23.9% to the closing prices on October 28, 2026. Trading in Lumentum shares was halted pending the announcement, after the stock had fallen 8.5% on the previous trading day.

Upon completion of the transaction, Marvell shareholders are expected to own about 67% of the combined company on a fully diluted basis, with Lumentum shareholders holding about 33%. Both boards of directors have approved the deal unanimously. Marvell’s chairman and chief executive officer, Matt Murphy, will continue in his roles, while three Lumentum directors, including CEO Michael Hurlston, will join Marvell’s board, which currently has seven members.

The companies project more than $1 billion in annual run-rate cost savings from the combination. They also state that the acquisition is expected to be accretive to Marvell’s non-GAAP earnings per share in the first year after closing. The deal is anticipated to close in the first half of 2028, subject to shareholder approvals from both companies, regulatory clearances and other customary closing conditions.

Marvell describes the transaction as a way to strengthen its position in AI data-center hardware by combining its custom XPU, networking switch and advanced semiconductor capabilities with Lumentum’s high-performance lasers, optical transceivers, optical circuit switching and compound semiconductor manufacturing. The combined companies expect to address a total addressable market of $550 billion, reflecting the scale of opportunity they see in AI infrastructure and related connectivity.

Executives highlight a broader architectural shift in AI infrastructure toward optical connectivity, positioning the merged group to supply components and systems needed to move data rapidly between chips in large-scale AI data centers. Marvell has already expanded in photonics, including a prior $3.5 billion purchase of Celestial AI, and views adding Lumentum’s portfolio as a significant further step in that direction.

In early trading on the day of the announcement, Marvell shares were up about 3.4%, while Lumentum shares gained about 2.5% before the trading halt. Lumentum’s shares had declined about 8% and Marvell’s about 22% amid a broader chip-sector selloff linked to a weak forecast from Intel (INTC).

Lumentum reported fiscal first-quarter adjusted earnings per share of $4.57 on revenue of $1.26 billion, with adjusted operating income of $534.4 million and an adjusted gross margin of 53.2%. The company expects second-quarter revenue between $1.575 billion and $1.625 billion and adjusted earnings per share between $5.90 and $6.20, with a forecast non-GAAP operating margin of 45% to 46%. These results and outlook provide the latest snapshot of Lumentum’s financial performance as it prepares to join Marvell.