Marvell to buy Lumentum in $115 billion AI connectivity deal
Marvell agreed to buy Lumentum in a $115 billion all-stock deal, the largest merger of two public companies, with closing targeted for early 2028.
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Marvell Technology has agreed to acquire optical components maker Lumentum in an all-stock transaction it values at about $115 billion, a combination the chipmaker described as the largest merger between two publicly traded companies. The terms, announced in Marvell’s investor release, give each Lumentum share 4.5 Marvell shares, Fox Business reported.
On Fox Business’s “The Claman Countdown,” Marvell chairman and CEO Matt Murphy called the pairing a chance to build a “category leader” in AI connectivity, while Lumentum CEO Michael Hurlston said the two firms would do “much better together” than either would alone. Marvell designs AI chips and data-center technology; Lumentum builds lasers and optical parts that move data between chips and servers using light.
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Key facts
- The all-stock deal is valued at roughly $115 billion, with an exchange ratio of 4.5 Marvell shares per Lumentum share.
- Blockonomi reported the terms value each Lumentum share at about $1,132, a 23.9% premium to the companies’ unaffected closing prices on October 28, 2026, and would leave existing Marvell holders with about 67% of the combined company and Lumentum holders 33%.
- Marvell expects more than $1 billion in annual cost synergies and sees a combined addressable market of about $550 billion, according to Blockonomi.
- Murphy would lead the combined company, and three Lumentum directors, including Hurlston, would join Marvell’s seven-member board.
- The companies expect to close in the first half of 2028, subject to shareholder approval and regulatory clearance.
Markets punish both stocks
Investors sold the news. CNBC reported Marvell shares fell 13% in Monday trading and Lumentum’s stock dropped nearly 19%. Blockonomi put Marvell’s decline at 6.35% to $183.93, a loss of $12.47 in the session — a different figure from CNBC’s, with the two outlets likely measuring at different points of the trading day.
Both stocks had been strong performers before the announcement. CNBC noted Marvell had more than doubled over the prior year and Lumentum had quadrupled, and that Lumentum’s stock more than doubled in 2026 alone. Fox Business cited market values of around $76 billion for Lumentum and roughly $172 billion for Marvell.
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Nvidia’s role and the connectivity bet
Nvidia is an investor in both companies. Fox Business reported that Hurlston said Murphy raised the idea with Nvidia CEO Jensen Huang early in the process and that the reaction was “super positive.” Murphy told CNBC the combination amounts to a “double down” on supporting Nvidia, and dismissed criticism of the chipmaker’s practice of investing in companies that buy its products.
Murphy told CNBC the merged business would sell connectivity solutions that are “highly sticky” because demand is outstripping supply. The deal follows Marvell’s closing this year of a multibillion-dollar purchase of Celestial AI, a startup working on optical interconnectivity, CNBC reported.
Why it matters
AI data centers are shifting from copper links toward optical connections as systems grow larger and need more bandwidth, and the deal would put electrical and optical design under one roof. That affects hyperscalers building clusters, rivals selling interconnect gear, and Nvidia, which depends on both suppliers. It also marks one of 2026’s biggest wagers on AI infrastructure at a time when investors have questioned how long the spending can last.
What to watch
Shareholder votes at both companies and regulatory clearances stand between the agreement and a first-half 2028 close. Marvell also said its preliminary fiscal third-quarter 2027 revenue came in within prior guidance, narrowing the range to plus or minus 2% from 5%, per Blockonomi.
Because the exchange ratio is fixed and no cash changes hands, the deal’s dollar value will rise and fall with Marvell’s share price. This is not financial advice, and markets are volatile and uncertain.
Sources: Fox Business, Blockonomi, CNBC
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