Marvell announced on Monday 2 November 2026 that it will buy Lumentum, which makes optical components used in AI data centres. The all-stock deal values the target at $115 billion including debt. Both boards approved it unanimously, and Marvell chief executive Matt Murphy stays on as chairman and CEO of the combined company.
“But this is an enormous bet, and investors are right to ask whether Marvell is paying too much and taking on too much at once.”
Axel Rudolph, chief technical analyst at IG Group, quoted by Reuters · calcalistech.com ↗
Lumentum shareholders will receive 4.5 Marvell shares for each of theirs, worth $1,132 a share, a 23.9% premium on the 28 October close before news of talks emerged. Its equity is valued at $102.54 billion, and its holders would own about a third of the combined business. Closing is expected in the first half of 2028, subject to approvals. Marvell says the deal lifts its addressable market to $550 billion. Lumentum had guided to second-quarter revenue of $1.58 billion to $1.63 billion, above the analyst average of $1.48 billion.
A Marvell executive presenting the Teralynx T100 Ethernet switch chip on stage at a company event
Image: The Motley Fool
The talks leaked first. Bloomberg reported on 28 October that Marvell was in advanced discussions, and Marvell's shares fell around 13 to 14% the next day. With only about $3.93 billion in cash, an all-stock structure was expected, which means diluting existing holders. Analysts worried about dilution and regulatory scrutiny, and some asked why Lumentum would sell when it says its capacity is sold out through fiscal 2029. Clients of the research firm Evercore ISI raised that question directly. Others saw complementary products and faster growth in optical interconnects over the next two or three years. Outlets differed on Lumentum's earlier market value, at roughly $83 billion or $85 billion.
About Marvell
Marvell Technology is a semiconductor company headquartered in Santa Clara, California. It was founded in 1995 by Sehat Sutardja, Weili Dai and Pantas Sutardja, and its first product was a read channel chip for disk drives, with Seagate as its first customer.
This is not the first time Marvell has grown by acquisition. It completed its purchase of Cavium on 6 July 2018, then the Inphi acquisition in April 2021, after which the combined company was domiciled in Wilmington, Delaware. In December 2025 it agreed to buy the photonic-fabric maker Celestial AI, at a price its Wikipedia page lists as $3.25 billion.
Marvell has been buying its way into this area: it finished its $3.5 billion Celestial AI purchase in February, signed a deal in August to supply chips alongside Google's AI processors, and was already a customer for Lumentum's lasers. Its own numbers are strong, with fiscal 2026 revenue of $8.2 billion and a record $2.74 billion in the latest quarter, up 37%. Shares of both companies had slipped earlier amid worries about an AI bubble, and Lumentum may also gain if a proposed US ban on new Chinese optical transceivers goes ahead. Nvidia put $2 billion into each company earlier this year. Murphy described a shift toward optical connectivity as a once-in-a-generation opening, while IG Group analyst Axel Rudolph called the price a huge gamble.
Marvell's Santa Clara headquarters (file photo from 2022)
Image: TechNews