U.S. stock optical module leader Marvell announced an all-stock acquisition of optical chip leader Lumentum, with a consideration of approximately 115 billion USD

According to Marvell's announcement, the company has reached a final agreement to acquire Lumentum in an all-stock transaction.

The agreement stipulates that Lumentum shareholders will receive 4.500 shares of Marvell common stock for each share they own, implying an enterprise value of approximately $115 billion for Lumentum, equivalent to about $1132 per share, representing a premium of approximately 23.9% over the closing price on October 28, which was unaffected by rumors. After the transaction is completed, existing Marvell shareholders will hold about 67%, while Lumentum shareholders will hold about 33%.

Both parties stated that the merger will integrate Marvell's capabilities in electrical and optical interconnects, switching, and custom chips, along with Lumentum's strengths in high-performance lasers, optical transceiver modules, and optical circuit switching, aiming to create a full-stack connectivity portfolio for AI infrastructure and expand the addressable market size to approximately $550 billion.

The transaction is expected to achieve over $1 billion in annualized operating cost synergies and is anticipated to enhance Marvell's non-GAAP earnings per share in the first year post-closing. The closing is expected in the first half of 2028, pending approval from both parties' shareholders and regulators. After the closing, Matt Murphy will continue to serve as Chairman and CEO, and three directors from Lumentum, including CEO Michael Hurlston, will join Marvell's board of directors.