Marvell to buy Lumentum for $115bn in all-stock AI connectivity deal

Marvell, the custom chip designer, agreed to acquire optical chip and networking equipment maker Lumentum in an all-stock deal with an enterprise value of $115 billion, including debt, according to TechCrunch.

Under the terms, each Lumentum share will be exchanged for 4.5 Marvell common shares, about 24% above Lumentum's 28 October close, TechCrunch reported. TechCrunch put the equity value at about $80 billion, while wire coverage cited a figure closer to $102.5 billion.

Marvell said the deal would make it a leader in AI connectivity, from chips to data centres, with more than $1 billion of expected annual cost synergies. Nvidia is a major shareholder in both companies: it invested $2 billion in Lumentum to support R&D and fab expansion, and later invested a similar amount in Marvell.

The deal is expected to close in the first half of 2028, subject to shareholder and regulatory approvals. It ranks among the largest technology acquisitions ever, above Microsoft's $68.7 billion purchase of Activision Blizzard in 2022 and Dell's $67 billion acquisition of EMC in 2016.

What do these terms mean?

Enterprise value: The full value of a company including debt, not just the value of its shares. It is used in large deals to give a clearer picture of the real price.

All-stock deal: A deal in which the buyer pays with new shares instead of cash, making the target's shareholders partners in the combined company.

Optical chips: Chips that use light rather than electrical signals to move data, needed by data centres to speed links between AI units.

Cost synergies: The savings a company expects after merging two operations, by cutting duplicate costs or overlapping roles.