Marvell Technology, Inc. (NASDAQ:MRVL) announced Monday that it has agreed to acquire Lumentum Holdings Inc. (NASDAQ:LITE) in an all-stock deal valued at approximately $115 billion, expanding its presence in the fast-growing artificial intelligence infrastructure market.
Under the agreement, Lumentum shareholders will receive 4.5 Marvell shares for each share they own.
The deal values Lumentum at approximately $1,132 per share, representing a 23.9% premium to the companies' unaffected closing stock prices on Oct. 28.
Following the merger, Marvell shareholders will own approximately 67% of the combined company, while Lumentum shareholders will hold the remaining 33%.
As of Aug. 1, Marvell had $3.93 billion in cash and cash equivalents, according to its fiscal second-quarter results.
Deal Targets $550 Billion AI Connectivity Market
The acquisition combines Marvell's semiconductor, networking and custom silicon technologies with Lumentum's expertise in high-performance lasers, optical transceivers and optical circuit switching.
The companies expect the combination to expand their total addressable market to $550 billion.
The deal comes as growing AI workloads drive demand for faster, more energy-efficient data connections. Optical technologies are increasingly replacing traditional copper connections as AI infrastructure becomes more complex.
Marvell CEO Matt Murphy said the shift toward optical connectivity presents a major opportunity to reshape AI infrastructure.
Lumentum CEO Michael Hurlston said the combination would help customers accelerate innovation, improve performance and bring advanced connectivity products to market faster.
Marvell Expects Over $1 Billion in Annual Savings
Marvell expects the transaction to generate more than $1 billion in annual run-rate cost synergies.
The company also anticipates stronger long-term revenue growth and improved adjusted gross and operating margins.
The acquisition is expected to boost Marvell's adjusted earnings per share in the first year after closing.
Both companies' boards unanimously approved the transaction.
Murphy will remain chairman and CEO of the combined company. Three Lumentum directors, including Hurlston, will join Marvell's board.
The deal is expected to close in the first half of 2028, subject to shareholder and regulatory approvals.
Marvell Provides Preliminary Quarterly Update
Alongside the acquisition announcement, Marvell said its preliminary fiscal third-quarter 2027 revenue remained consistent with its previous guidance.
The company maintained the midpoint of its revenue forecast while narrowing the expected range to plus or minus 2%, compared with the previous range of plus or minus 5%.
Lumentum also reported better-than-expected fiscal first-quarter 2027 results. Adjusted earnings of $4.57 per share beat the analyst estimate of $4.19, while revenue of $1.263 billion topped Wall Street's estimate of $1.249 billion.
Price Action: Lumentum Holdings shares were down 6.51% at $786.00 and Marvell Technology shares were down 3.05% at $190.40 during premarket trading on Monday, according to market data.
