Marvell doubles down on AI boom with costly $115 billion Lumentum deal
LITE•Marvell will buy Lumentum in a $115 billion all-stock deal, including debt, valuing Lumentum’s equity at $102.5 billion. Marvell shares fell more than 10% and Lumentum shares dropped over 15% after the deal was announced.
1. AI connectivity bet
Marvell is buying optical components maker Lumentum in a $115 billion all-stock deal, including debt, to expand its push into AI infrastructure and compete more aggressively with Broadcom. Marvell CEO Matt Murphy will remain chairman and CEO of the combined company.
2. Deal terms and outlook
Marvell will pay $1,132 per share, a 23.9% premium to Lumentum’s last unaffected closing price. Lumentum shareholders will receive 4.5 Marvell shares for each share they own and hold roughly 33% of the combined company. The companies expect the deal to close in the first half of 2028; Marvell said the combined company would generate more than $21 billion in annual revenue, based on near-term forecasts.
3. Investor concerns
Marvell shares fell more than 10% after the announcement, while Lumentum shares dropped over 15%. The deal’s $102.5 billion equity value is more than half of Marvell’s market capitalization and over 10 times the price of its previous biggest purchase, the $10 billion Inphi acquisition in 2021. Some analysts questioned whether Marvell was paying too much and taking on too much at once.
