Two Silicon Valley companies at the center of the AI build-out are combining. Santa Clara chipmaker Marvell Technology said Monday, Nov. 2, that it has agreed to acquire San Jose-based Lumentum in an all-stock deal that values Lumentum at $115 billion, one of the biggest tech deals ever.
The terms
Lumentum stockholders will receive 4.5 shares of Marvell for each Lumentum share, according to the companies' announcement. That works out to about $1,132 per Lumentum share, a premium of roughly 23.9% over the Oct. 28 closing prices, the last trading day before speculation about a deal began. After closing, current Marvell shareholders would own about 67% of the combined company and Lumentum shareholders about 33%.
Both boards approved the deal. It still needs approval from both companies' shareholders and regulators, and is expected to close in the first half of 2028.
Why they're doing it
Marvell makes data infrastructure chips, while Lumentum makes lasers, optical transceivers and optical circuit switches used in data centers. “AI infrastructure is undergoing a fundamental architectural shift toward optical connectivity, creating an opportunity that comes along once in a generation,” Marvell CEO Matt Murphy said in a statement quoted by CBS News Bay Area.
The companies say the deal would expand their total addressable market to $550 billion and expect more than $1 billion in annual cost savings.
How investors reacted
Markets were less sure. CBS reported that Marvell shares slid more than 1% before the opening bell Monday and Lumentum fell almost 3%, after a pullback in AI stocks last week. Nvidia had earlier taken a $2 billion stake in Lumentum, according to Bloomberg, as cited by CBS.