Marvell Technology and optical communication company Lumentum announced on Tuesday that the two parties have signed a final agreement, with Marvell Technology acquiring Lumentum in full stock.

According to the terms of the transaction, each shareholder of Lumentum who holds 1 share of Lumentum common stock may exchange it for 4.500 shares of Marvell Technology common stock.

The implied enterprise value of this transaction pair Lumentum is 115 billion US dollars, corresponding to a price of approximately 1,132 dollars per share; calculated based on the closing prices on October 28, 2026, which was the last trading day before the acquisition rumors surfaced in the market, and without any disturbance from these rumors, the premium is about 23.9%.

Calculated on a fully diluted basis, after the completion of the transaction, the original shareholders of Marvell Technology will hold approximately 67% of the shares in the merged company, while the original shareholders of Lumentum will hold about 33% of the shares.

The two companies stated that after the merger, the potential total market size of the combined company ( TAM ) is expected to expand to $550 billion.

Marvell Technology Chairman and CEO Matt Murphy stated: "The infrastructure of AI is undergoing a fundamental architectural transformation towards optical interconnection, which is an opportunity that comes once in a generation. The companies that take the lead in laying out and driving this transformation will define the industry standards for the next few decades. This merger brings together two leaders with highly complementary technologies, strong talent reserves, and exclusive manufacturing capabilities. We aim to lead the next era of AI interconnection and create substantial returns for our shareholders."

Lumentum President and CEO Michael Hirston stated: "After merging with Marvell Technology, the new company will possess unique advantages, enabling us to seize a $550 billion market opportunity and create sustained and substantial shareholder returns. The surge in AI data traffic has forced rapid iteration of hardware; this merger will enhance our ability to deliver next-generation solutions on a large scale. Together with Marvell, we will meet all of our customers' connectivity needs, covering current cross-cluster expansion and horizontal scaling scenarios, as well as future vertical scaling and internal interconnection scenarios. By relying on deeply collaborative design to meet customers' stringent requirements, we will help them shorten their time to market, accelerate their innovation pace, and create benchmark-level performance products."

The two companies stated that this merger possesses the following strategic value and financial benefits:

1. Build the leader in the AI interconnected track.The optoelectronic interconnection, switching, and custom chip technologies of Marvell, combined with the high-performance lasers, optical modules, and optical circuit switching capabilities of Lumentum, will form a complete interconnection product matrix that covers cross-cluster interconnection, horizontal expansion, vertical expansion, and interconnection within packages. After the merger, the combined company will be able to meet the interconnection needs of customers across various transmission distances and multiple topological architectures, ranging from distributed data centers to the interior of advanced chip packages.
2. Supports end-to-end deep collaborative design to accelerate customer innovation.Both companies stated that as the complexity of the AI infrastructure continues to rise, customers require a higher degree of integration and optimization of digital, analog, and optical technologies. Following the merger, the complementary technologies and engineering capabilities across the entire signal chain can be integrated to develop highly optimized and pre-verified optical solutions, which will enhance bandwidth, performance, and energy efficiency, reduce customer time-to-market, and support mass production on a larger scale.
3. Integrate specialized manufacturing capabilities and expand R&D resources.Lumentum will bring advanced compound semiconductor processes such as indium phosphide ( InP ), as well as the capability to manufacture high-speed, high-power lasers. The two companies stated that after the merger, the combined entity will integrate cutting-edge chip design, advanced packaging, and specialized production line capabilities to achieve deeper heterogeneous integration, strengthen supply chain security, and accelerate the development of next-generation optical technologies.
4. Create long-term shareholder value.The two companies stated that as a merger of two high-growth AI infrastructure enterprises, the transaction will expand TAM to $550 billion and strengthen their service capabilities in emerging vertical expansion and interconnect markets. The transaction is expected to improve long-term revenue growth, non-GAAP gross margin, and operating margin; the annualized cost synergies are expected to exceed $1 billion, and in the first year following the closing, it will increase Marvell Technology's non-GAAP earnings per share.

Transaction Architecture and Terms

Both companies stated that the agreement has been unanimously approved by the boards of directors of both parties. According to the agreement, for each share of common stock held by Lumentum shareholders at the time of delivery, they will be exchanged for 4.5 shares of Marvell common stock; on a fully diluted basis, Lumentum shareholders will hold approximately 33% of the equity in the merged company.

After the merger, Matt Murphy will continue to serve as the Chairman and Chief Executive Officer of the combined company. Three members of the board of directors, including Lumentum Chief Executive Officer Michael Hirston, will join Marvell's existing seven-person board of directors.

This transaction is expected to be completed in the first half of 2028. It still requires the approval of the shareholders' meetings of Marvell Technology and Lumentum, regulatory approvals from various countries, and compliance with other conventional delivery conditions.