Marvell Agrees to Buy Lumentum in $115 Billion All-Stock Deal, and Both Stocks Fall

MRVL agreed on Monday to acquire LITE in an all-stock transaction that values the maker of lasers and optical components at an implied enterprise value of $115 billion, one of the largest technology deals on record. Lumentum stockholders will receive a fixed 4.5 Marvell shares for each Lumentum share, worth about $1,132 at signing and a premium of about 23.9% based on each company's unaffected closing price on October 28, the last trading day before reports of talks. Marvell holders will own about 67% of the combined company on a fully diluted basis.

The strategic case is optical connectivity for AI data centers. Marvell CEO Matt Murphy, who will remain chairman and CEO, said AI infrastructure is shifting toward optical links, "creating an opportunity that comes along once in a generation," and the companies put the combined addressable market at $550 billion by calendar 2030. They say they have line of sight to more than $1 billion in annual run-rate cost synergies, mostly in cost of goods sold, and expect the deal to add to Marvell's non-GAAP earnings per share in the first year after closing. Lumentum CEO Michael Hurlston and two other Lumentum directors will join Marvell's board.

The market has not welcomed it. Marvell fell 13.24% on October 29 when the talks were first reported and about 10% the next session. By late Monday morning it was down about 7% at $182.30 and Lumentum was down about 13% at $732.03, per SentiSense quotes, far steeper than the 3% and 6% early-morning declines in 24/7 Wall St.'s headline. That leaves Marvell roughly 27% below its unaffected October 28 close, and it leaves Lumentum trading well below the $1,132 implied deal value, because the fixed exchange ratio ties the payout to Marvell's own share price. Optics peer COHR was roughly flat after rising 2% early.

What to watch: two shareholder votes, the U.S. Hart-Scott-Rodino review and other regulatory approvals the companies have not named, and an outside date of November 1, 2027 that can be extended to as late as August 1, 2028. Marvell also reaffirmed the midpoint of its fiscal third-quarter revenue guidance and narrowed the range. Separately, the fiscal 2031 targets of $70 billion to $90 billion in revenue and earnings per share of $30 or more that appear in some deal coverage were set at Marvell's October 6 investor day, before the deal, and are not combined-company guidance.