❯ Marvell announces an all-stock Lumentum acquisition at a $115 billion reference enterprise value to combine electrical and optical AI interconnects

From speculation to a public agreementMarvell and Lumentum announced their definitive acquisition agreement on November 2, after signing it on November 1. This week’s development is the formal disclosure of the agreement and exchange terms. Each Lumentum share would receive 4.5 Marvell shares, implying a reference enterprise value of about $115 billion using October 28 share prices, before speculation affected them.

Connecting chips and optical componentsMarvell supplies network switching, custom silicon, and electrical and optical interconnect technology. Lumentum contributes high-performance lasers, transceivers, optical circuit switching and manufacturing capabilities. Chips in large data centers must exchange data rapidly, increasing demands on bandwidth, transmission distance and power use. The companies aim to coordinate electrical signal processing and optical transmission in one design process, reducing the integration work customers perform across separate components.

A fixed share ratio, a variable valueThe agreement fixes the 4.5-for-one exchange ratio; the value delivered at closing will move with Marvell’s share price. Current Marvell shareholders are expected to own approximately 67% of the combined company and Lumentum shareholders approximately 33%. Issuing stock provides the acquisition consideration while leaving Lumentum investors exposed to the combined company’s operating and market performance.

Integration follows approvalsThe companies expect to close in the first half of 2028, subject to both shareholder votes, regulatory approvals and customary conditions. Their plans span chip design, advanced packaging and specialized semiconductor manufacturing, alongside an expectation of more than $1 billion in annual run-rate cost synergies. Those benefits depend on closing and integration. Customers currently continue to deal with two independently operating businesses.

▮ SIGNALThe transaction seeks influence over joint electrical and optical design in AI systems: as buyers favor fully validated interconnect solutions, suppliers spanning chips, optical components and manufacturing processes have more opportunity to shape architectures early.