Marvell agreed on November 2 to buy optical maker Lumentum in an all-stock deal valued at $115 billion including debt: 4.5 Marvell shares per Lumentum share, about $1,132 each, a 23.9% premium. Closing is expected in the first half of 2028.
Marvell Technology agreed on November 2 to buy Lumentum, the maker of lasers and optical transceivers used to link AI servers, in an all-stock deal the companies value at $115 billion including debt. Nothing changes for anyone buying networking gear or cloud capacity today: the deal is not expected to close until the first half of 2028. It does put the chips that move data between AI accelerators and the lasers that carry it over fiber under one company.
What changed
The terms, from the joint announcement Lumentum filed with the SEC as an 8-K exhibit:
- Price: Lumentum holders get a fixed 4.5 Marvell shares for each Lumentum share. That works out to about $1,132 a share, a 23.9% premium over both stocks’ unaffected closing prices on October 28.
- Value: $115 billion enterprise value. The Wall Street Journal put the equity value at about $80 billion, according to TechCrunch.
- Ownership after closing: about 67% Marvell stockholders, 33% Lumentum stockholders.
- Leadership: Matt Murphy stays chairman and CEO. Three Lumentum directors, including CEO Michael Hurlston, join Marvell’s board.
- Approvals: both boards approved it unanimously. It still needs both sets of stockholders and regulators.
- Targets: Marvell says it sees a path to more than $1 billion a year in cost savings and expects the deal to add to its non-GAAP earnings per share in the first year after closing.
TechCrunch ranks it among the largest tech deals on record, above Microsoft’s $68.7 billion purchase of Activision Blizzard in 2022 and Dell’s $67 billion purchase of EMC in 2016.
Why Marvell wants the lasers
The release names the reason directly: AI clusters need more bandwidth than copper can carry over distance, so more connections are moving to light. Marvell already sells the electrical and optical interconnect chips, switches and custom accelerators that cloud providers design with it. Lumentum makes the other half: the lasers, optical transceivers and optical circuit switches. Its indium phosphide laser production is the asset the release singles out. The companies say together they can sell pre-tested electrical and optical parts as one package, from links between data centers down to connections inside a chip package. They put the combined addressable market at $550 billion.
Nvidia sits on both sides of the deal
Nvidia invested $2 billion in Lumentum in March under a multi-year agreement to buy its laser components, and another $2 billion in Marvell the same month, according to TechCrunch. That makes Nvidia the one major shareholder the two companies have in common. It also means the largest buyer of AI networking parts will see one of its key laser suppliers sit inside a company that builds custom chips for its cloud customers.
For readers who run infrastructure or buy cloud capacity, the practical takeaways are short:
- No change before 2028. Both companies keep selling separately until the deal closes, and closing depends on regulators.
- Optical parts stay tight. The deal is a bet that AI networking demand keeps growing. It adds no new production capacity on day one.
- Watch the review. The companies give themselves until the first half of 2028 to close, a long window that reflects multi-country antitrust review for a deal this size.
AI compute spending is what drives all of this. Anthropic alone disclosed $895.4 billion in compute commitments in its amended IPO filing, and every one of those clusters needs the kind of links Marvell and Lumentum sell.