A $115 billion bet that AI's wiring turns to light

Marvell Technology has agreed to acquire Lumentum, the maker of high-performance lasers, optical transceivers and optical circuit switches, in an all-stock transaction. Lumentum stockholders will receive 4.500 Marvell shares for each share they hold. The companies put the implied enterprise value at $115 billion, about $1,132 per Lumentum share and a premium of about 23.9 percent on unaffected prices; Lumentum holders would own about 33 percent of the combined company. Both boards approved the deal unanimously.

The argument is about physics as much as finance. The announcement says growing bandwidth needs and the physical limits of copper are pushing AI infrastructure toward optical connections, and that as systems scale up the industry is moving from discrete components to integrated optical solutions that need electrical and optical parts designed together. Marvell brings electrical and optical interconnect, network switching and custom XPU silicon; Lumentum brings lasers, transceivers, optical circuit switching and compound semiconductor manufacturing, including indium phosphide.

The financial claims are the companies' own expectations. They say the combination expands the addressable market to $550 billion, gives line of sight to more than $1 billion in annual run-rate cost synergies, and should add to Marvell's non-GAAP earnings per share in the first year after closing. Matt Murphy would remain chairman and chief executive, and three Lumentum directors, including chief executive Michael Hurlston, would join Marvell's seven-member board.

The timeline is long. Closing is expected in the first half of calendar 2028, subject to approval by both sets of stockholders and by regulators. Marvell also reported preliminary third-quarter revenue in line with its earlier guidance, narrowing the range to plus or minus 2 percent, while Lumentum published its own quarterly results the same day.