Marvell to Buy Lumentum in $115 Billion All-Stock Deal, One of Tech's Biggest Ever

Marvell Technology announced Monday that it will acquire Lumentum Holdings in a deal valued at $115 billion, making it one of the largest technology transactions on record. Lumentum makes lasers, optical circuit switches and other components used inside data centers. Marvell, founded in 1995, designs data infrastructure semiconductors.

Marvell said the purchase would make the combined company a "category leader in AI connectivity." CEO Matt Murphy framed it as a bet on a coming shift in how AI computing is wired together. "AI infrastructure is undergoing a fundamental architectural shift toward optical connectivity, creating an opportunity that comes along once in a generation," Murphy said in a statement. "The companies that move first and help define this transition will set the standard for decades to come."

The terms were laid out in regulatory filings. The deal is all stock. Lumentum shareholders will receive a fixed 4.500 shares of Marvell common stock for each Lumentum share they own. That values Lumentum at an implied enterprise value of $115 billion, or about $1,132 per share, a premium of roughly 23.9% over its unaffected share price on Oct. 28. After the deal closes, current Marvell shareholders would own about 67% of the combined company and Lumentum shareholders about 33%, on a fully diluted basis.

Nvidia is already tied to the target. Earlier this year it agreed to take a $2 billion stake in Lumentum, according to Bloomberg, as part of a collaboration on photonics. The filings reviewed did not say how that stake would be treated in the merger. Marvell is also a maker of custom silicon, a business that competes in places with Nvidia, so the deal would put one of Nvidia's optical suppliers under a rival's roof.

Investors did not cheer. Marvell shares slid more than 1% before the opening bell Monday, and Lumentum fell almost 3% after the announcement, even though acquisition targets usually rise. The reaction comes after what CBS News described as an aggressive pullback in AI stocks last week. Marvell said it still believes the investment is warranted despite that volatility.

The company said the merger would pair complementary technologies and engineering expertise, letting it offer an end-to-end system that serves a broader set of customers. The deal still needs approval from stockholders of both companies. It is expected to close in the first half of 2028, a long runway that leaves room for regulatory review and for the AI investment cycle to change course.

The deal lands in the middle of a data center construction boom that has sparked backlash across the country, over power use, land and local costs. Marvell's wager is that as AI clusters grow, moving data between chips with light rather than copper becomes the limit on performance, and that owning the laser and switching supply is the way to control it. Whether $115 billion is the right price for that thesis is the question Wall Street began answering on Monday.