US-listed optical module leader Marvell announced an all-stock acquisition of optical chip leader Lumentum, with a consideration of approximately $115 billion.

According to Marvell's announcement, the company has reached a definitive agreement with Lumentum to acquire the latter in an all-stock transaction. Under the terms, Lumentum shareholders will receive 4.500 shares of Marvell common stock for each Lumentum share they hold. The transaction implies an enterprise value of approximately $115 billion for Lumentum, equivalent to around $1,132 per share, representing a premium of roughly 23.9% over the unadjusted closing prices of both companies on October 28, unaffected by prior rumors. Upon completion, existing Marvell shareholders will hold approximately 67% of the combined entity, while Lumentum shareholders will own about 33%. The two firms stated that the merger will integrate Marvell's capabilities in electrical and optical interconnects, switching, and custom chips, as well as Lumentum's strengths in high-performance lasers, optical transceivers, and optical circuit switches. The goal is to build a full-stack connectivity portfolio for AI infrastructure and expand the addressable market to around $550 billion. The transaction is expected to generate over $1 billion in annual operational cost synergies and is projected to boost Marvell's non-GAAP earnings per share in the first full year after closing. Closing is anticipated in the first half of 2028, pending approval from both companies' shareholders and regulatory authorities. Post-closing, Matt Murphy will remain Chairman and Chief Executive Officer, and three Lumentum directors, including Chief Executive Officer Michael Hurlston, will join Marvell's board of directors.