Marvell to Acquire Lumentum in a $115 Billion Deal Targeting AI Data Center Optics

Marvell Technology has agreed to acquire Lumentum Holdings in an all-stock deal valued at about $115 billion, with Lumentum's equity valued at roughly $102.5 billion. The deal carries a 23.9% premium and is expected to close in the first half of 2028.

What Lumentum makes

Lumentum makes lasers and optical components that move large amounts of data at high speed between the processors in AI data centers, increasingly replacing copper wiring. Nvidia took a $2 billion stake in Lumentum earlier this year in a deal that also included photonics collaboration, and reports say the company's optical parts are sold out through early 2029.

The strategic logic

RBC Capital Markets said the deal makes strategic sense given the complementary product portfolios, as Marvell already buys lasers from Lumentum. Marvell is also seeking to fill gaps in its optical offering and compete with Broadcom. It acquired photonics company Celestial AI earlier this year.

Market reaction

Marvell shares fell more than 10% and Lumentum shares more than 15% on Monday, amid concerns about shareholder dilution, the cost of the deal and regulatory scrutiny. Bloomberg had reported days earlier that the two companies were in advanced talks.

Sources: TechStartups, The Next Web, TrendForce.