Marvell Bets $115 Billion on Lumentum and AI Connections

Lumentum shareholders would receive 4.5 Marvell shares for each share they own, valuing the all-stock deal at about $115 billion. That is a 23.9% premium over Lumentum’s October 28 closing price, before reports of deal talks emerged. The companies expect the transaction to close in the first half of 2028, if approvals come through. ^1,6

The 2028 target reflects Marvell’s bet on the parts of AI data centers that move information, not just the chips that process it. Lumentum makes lasers and other light-based parts that carry data between computers. Marvell sells custom chips and networking products and already buys lasers from Lumentum. Marvell chief executive Matt Murphy will lead the combined company; existing Marvell shareholders would own about 67%, and Lumentum shareholders about 33%. ^3,6

That 33% stake gives Lumentum investors a large share of a broader business, while the tie-up could give Marvell more control over the parts needed to connect AI systems. The companies say the merger could expand the market they can sell into to $550 billion. It could bring more than $1 billion in yearly cost savings and increase Marvell’s adjusted earnings per share in the first year after closing. But investors pushed both stocks lower as they weighed the price, the dilution of their shares and uncertainty over whether heavy AI spending will last. ^1,6,7

That bet on AI spending now faces a long path to approval and completion. The boards of both companies approved the agreement, but shareholders at both firms must vote, regulators must approve it, and the companies still need to combine their operations. Until closing, they will remain separate, and Lumentum says its current orders, supplier agreements and day-to-day contacts will stay unchanged. ^4,6