U.S. semiconductor giant Marvell has entered into a definitive agreement to acquire optical technology company Lumentum in an all-stock transaction.
Lumentum stockholders will receive 4.5 shares of Marvell common stock for each share they own, the firms said in a press release on Monday. The transaction is expected to close in the first half of 2028, subject to shareholder and regulatory approvals.
The deal has an implied enterprise value of $115 billion for Lumentum. Upon closing, current Marvell stockholders will own approximately 67% of the combined company on a fully diluted basis, while Lumentum stockholders will own approximately 33%.
Transition toward optical technologies
Amid the rapidly growing bandwidth requirements of the AI infrastructure buildout, the physical limitations of copper-based connectivity are accelerating the transition toward optical technologies, Marvell said. The combined firm aims to become a category leader in AI connectivity, with the companies projecting a total addressable market of $550 billion following the acquisition.
"AI infrastructure is undergoing a fundamental architectural shift toward optical connectivity, creating an opportunity that comes along once in a generation," Marvell Chairman and CEO Matt Murphy said. "The companies that move first and help define this transition will set the standard for decades to come."
"Joining Marvell creates a company uniquely positioned to capitalize on a market opportunity of $550 billion and generate significant, sustainable stockholder value," Lumentum President and CEO Michael Hurlston added. "Surging AI data traffic requires rapid hardware innovation, and this combination enhances our ability to deliver next-generation solutions at scale."
The companies also expect more than $1 billion in annual run-rate cost synergies following the acquisition, according to the release.
Marvell (Nasdaq: MRVL) is trading down 8% on Monday following the news at $183.25. Lumentum (Nasdaq: LITE) is currently down 13% at $729.40.