Marvell Technology has agreed to acquire optical-components maker Lumentum in an all-stock transaction valued at approximately $115 billion, including debt. The deal will expand Marvell’s presence in AI data-centre connectivity and strengthen its position against larger rival Broadcom.
The transaction values Lumentum’s equity at approximately $102.5 billion. Under the agreement, Lumentum shareholders will receive 4.5 shares of Marvell common stock for each Lumentum share they own. The offer represents a premium of approximately 23.9% over Lumentum’s closing share price on October 28, before reports of a possible transaction emerged.
Following completion, Marvell shareholders are expected to own approximately 67% of the combined company, while Lumentum shareholders will hold the remaining 33%. Marvell CEO Matt Murphy will continue as chairman and chief executive of the combined business.
The acquisition reflects Marvell’s expectation that demand for optical connectivity will increase as technology companies expand AI infrastructure. Large data centres increasingly connect thousands of processors that need to exchange information at high speeds. Optical components help move data between these systems and address limitations associated with traditional copper-based connections.
Marvell said the combined company is expected to generate more than $21 billion in annual revenue, with adjusted operating margins in the low 40% range, based on near-term forecasts.
The deal is one of the largest technology acquisitions announced in 2026. It also brings together two companies that have received investments from Nvidia, which invested $2 billion in each company earlier in the year.
However, investors reacted cautiously to the announcement. Marvell shares fell more than 10%, while Lumentum shares declined over 15% on concerns about the transaction’s cost, financing risks and the broader expenses associated with the AI infrastructure build-out.
The transaction is expected to close in the first half of 2028, subject to approval from shareholders and regulatory authorities. The agreement includes provisions for termination fees under specified circumstances.
With the acquisition, Marvell is making a major investment in optical technology as demand for faster data movement becomes increasingly important to the expansion of AI data centres.
