Marvell Technology announced on Monday, November 2, that it will acquire optical components maker Lumentum in an all-stock transaction with an implied enterprise value of 115 billion dollars, one of the biggest deals of 2026 and a direct challenge to Broadcom in AI data center hardware. The companies said they have entered a definitive agreement, unanimously approved by both boards.
Under the terms, Lumentum stockholders will receive a fixed exchange ratio of 4.500 shares of Marvell common stock for each Lumentum share they own. That values Lumentum at approximately 1,132 dollars per share, a premium of about 23.9 percent based on each company's unaffected closing price on October 28, 2026, the last trading day before market speculation about a deal began. After closing, current Marvell stockholders will own about 67 percent of the combined company on a fully diluted basis, and Lumentum stockholders will own about 33 percent.
The logic is the shift from copper to light inside AI data centers. The companies argue that rapidly growing bandwidth requirements and the physical limitations of copper-based connectivity are accelerating the transition toward optical technologies, especially as AI systems grow into more complex scale-up and scale-in architectures. Instead of discrete, modular components, they say customers now need highly integrated optical solutions co-designed with the electrical side to deliver more bandwidth with better energy efficiency.
The combination pairs Marvell's strengths in electrical and optical interconnect, network switching, custom processors and advanced semiconductor design with Lumentum's high-performance lasers, optical transceivers, optical circuit switching and specialized compound semiconductor manufacturing, including indium phosphide. The combined portfolio is meant to span leading-edge CMOS, silicon photonics, compound semiconductors and advanced packaging, covering connectivity from distributed data centers down to connections within advanced semiconductor packages.
Marvell Chairman and CEO Matt Murphy called the shift toward optical connectivity an opportunity that comes along once in a generation, saying the companies that move first will help set the standard for decades. Lumentum President and CEO Michael Hurlston said joining Marvell positions the combined company for a market opportunity of 550 billion dollars. The companies expect the deal to expand that total addressable market, provide line of sight to more than 1 billion dollars in annual run-rate cost synergies, and be accretive to Marvell's non-GAAP earnings per share in the first year after closing.
Murphy will continue as chairman and CEO of the combined company, and three Lumentum directors, including Hurlston, will join Marvell's board. The transaction is expected to close in the first half of calendar year 2028, subject to approval by both companies' stockholders, regulatory approvals and other customary conditions. Marvell also reported preliminary revenue for its fiscal third quarter of 2027 consistent with prior guidance, narrowing its expected range, while Lumentum separately issued its fiscal first quarter 2027 results.
Reuters noted that Marvell has been building its photonics business all year, closing a 3.5 billion dollar purchase of Celestial AI in February, and that this is its largest acquisition since the 10 billion dollar buyout of Inphi in 2021. For enterprise and cloud buyers, the takeaway is consolidation at the interconnect layer: as AI clusters scale, the company supplying both the custom silicon and the optics that link it stands to shape how the next generation of data centers is built.