Marvell to buy Nvidia-backed Lumentum in a $115bn all-stock deal

Marvell Technology has agreed to buy Lumentum in an all-stock deal. Lumentum makes lasers and other optical parts for AI data centres. The two companies valued Lumentum at $115bn, including debt, when they announced the deal on Monday.

Lumentum shareholders will get 4.5 Marvell shares for each share they own, the companies said in a joint statement. That works out at about $1,132 per Lumentum share. That is a premium of about 23.9% to the closing price on 28 October. It was the last trading day before the talks were first reported.

Marvell shareholders will own about 67% of the combined company and Lumentum shareholders about 33%. Both boards approved the deal unanimously. It still needs approval from shareholders and regulators. The companies expect it to close in the first half of 2028.

“AI infrastructure is undergoing a fundamental architectural shift toward optical connectivity, creating an opportunity that comes along once in a generation,” said Matt Murphy, Marvell’s chairman and chief executive.

Murphy will stay on as chairman and chief executive. Three Lumentum directors, including chief executive Michael Hurlston, will join Marvell’s board, which has seven members.

The year’s biggest deal

On an equity basis, the Marvell Lumentum acquisition is the largest deal of 2026. It is also the largest ever in the global technology sector, excluding the SpaceX and xAI merger, according to data compiled by Bloomberg. Bloomberg first reported on 28 October that the two companies were close to a deal.

Lumentum shares gained 128% this year up to Friday’s close, giving it a market value of about $76bn, Bloomberg reported. Marvell was worth $172.2bn.

The deal gives Lumentum an equity value of $102.54bn, Anhata Rooprai reported for Reuters. Lumentum shares have fallen about 8% since the talks became public, and Marvell about 22%, according to Reuters. The wider chip selloff picked up after Intel’s weak forecast, Reuters added.

Chips and lasers together

Lumentum makes high-performance lasers, optical transceivers and optical circuit switches. Marvell designs custom AI chips, network switches and the links between them. Marvell already buys laser technology from Lumentum, Bloomberg reported.

The companies said copper connections are reaching their physical limits as AI systems grow. That is pushing data centres towards optical links. They expect the combined company to target a market worth $550bn. They also see a path to more than $1bn a year in cost savings. The deal should add to Marvell’s adjusted earnings per share in its first year after closing, they said.

“Surging AI data traffic requires rapid hardware innovation, and this combination enhances our ability to deliver next-generation solutions at scale,” said Hurlston.

Nvidia invested $2bn in each company earlier this year, Reuters reported. Its Marvell stake came with an AI partnership.

Broadcom and China

The deal could help Marvell compete with Broadcom, Google’s main custom-chip partner, Reuters reported. In August, Marvell agreed a chip deal with Google worth up to $120bn in sales through fiscal 2033. It gives Google the right to buy a $12.2bn stake in Marvell.

Lumentum competes with Coherent and China’s Zhongji Innolight. A proposed US ban on new Chinese optical transceivers could shift demand towards US suppliers such as Lumentum, according to Reuters.

Alongside the deal, Marvell said its revenue for the quarter that ended on 31 October is in line with its guidance. Lumentum forecast revenue of $1.58bn to $1.63bn for its fiscal second quarter, above analysts’ average estimate of $1.48bn, Reuters reported.

It is Marvell’s largest acquisition since it bought Inphi for $10bn in 2021, according to Reuters. Earlier this year, Marvell also bought Celestial AI, which builds photonic technology for moving data between chips.