One of Tech's Largest Mergers Finalized: Marvell to Acquire Lumentum for $115 Billion in All-Stock Deal

TradingKey - Marvell Technology (MRVL) announced an all-stock acquisition of data center optics manufacturer Lumentum (LITE), with an enterprise value of approximately $115 billion and an equity value of roughly $102.5 billion. If successfully completed, this will be one of the largest M&A transactions since 2026 and set a record for the largest merger between public technology companies.

As of press time, Marvell was down 0.77% in pre-market trading, while Lumentum fell more than 1%.

Under the agreement, Lumentum shareholders will receive 4.5 shares of Marvell common stock for each share held, implying a transaction price of approximately $1,132 per share, representing a premium of about 23.9% over the stock price before transaction news broke on October 28. Upon completion of the transaction, legacy Marvell shareholders are expected to hold approximately 67% of the combined company, with Lumentum shareholders holding the remaining 33%.

This acquisition reflects a shift in the focus of AI infrastructure competition from merely pursuing raw computing power to improving data transmission efficiency between chips and between data centers. As large models scale up, thousands or even tens of thousands of accelerators must run simultaneously. Traditional copper connections face increasingly evident limitations in distance, bandwidth, and power consumption, making optical interconnects a critical link in building large-scale AI clusters.

Marvell was already a customer of Lumentum's laser technology. Through the acquisition, Marvell can integrate key components such as custom AI chips, network processors, optical DSPs, and lasers into a single business ecosystem, further enhancing control over the AI data center connectivity supply chain. The company expects the total addressable market of the merged entity to expand to approximately $550 billion.

This transaction will also strengthen Marvell's competition against Broadcom (AVGO) in the custom AI chip and data center networking markets. Marvell currently collaborates with cloud computing companies such as Amazon (AMZN), Microsoft (MSFT), and Google (GOOGL) to develop custom chips and networking products for clients. In August 2026, the company reached a long-term agreement with Google, with cumulative revenue potential from related chip projects reaching up to $120 billion through fiscal year 2033.

In the photonics domain, Marvell previously acquired Celestial AI for approximately $3.25 billion to acquire a photonic interconnect platform for large-scale AI clusters. Bringing Lumentum under its wing indicates that the company is further transitioning from a chip designer into a comprehensive AI infrastructure provider spanning computing, networking, and optical communications.

Nvidia (NVDA) also plays an important role in this supply chain. Earlier this year, Nvidia invested $2 billion each in Marvell and Lumentum and advanced AI infrastructure-related collaborations with both companies. Nvidia's layout in photonics reflects the industry's search for data transmission methods more efficient than traditional copper connections. For Marvell, Lumentum is not only a key partner in its existing supply chain, but also a strategic asset to further expand its optical communications business.

However, the $115 billion transaction size also brings valuation and integration risks. Lumentum's stock price had previously risen significantly due to strong demand for optical communications, meaning Marvell is paying a high acquisition price during a period of strong industry momentum. The market will also focus on the dilution of legacy shareholder equity resulting from the new share issuance, the complexity of integrating the two companies' operations, and whether Lumentum's existing customers will adjust their suppliers due to its integration into Marvell.