Marvell Technology Inc has agreed to acquire Lumentum Holdings Inc in an all-stock transaction with an enterprise value of US$115 billion, linking a major designer of data-center chips with a supplier of optical components used to move information through those facilities.
Under the agreement, Marvell shareholders will receive 67% of the combined company. The transaction values Lumentum’s equity at approximately US$102.6 billion, according to the companies. The merger is expected to close in the first half of 2028, a timetable that points to a lengthy process for obtaining the necessary clearances.
A larger position in AI infrastructure
Marvell has been expanding its role in the systems that support artificial intelligence. The company already designs chips used in AI infrastructure, while Lumentum makes components that use light to transmit data around data centers. Combining those businesses would give Marvell a broader set of technologies tied to the movement of information inside facilities built to handle increasingly demanding workloads.
The deal is Marvell’s most ambitious effort to reposition itself as an AI-focused company, according to the report. It also reflects the way demand for AI infrastructure is influencing transactions across the technology industry. Bloomberg data cited in the report ranks the acquisition as the year’s largest mergers-and-acquisitions deal by equity value and the second-largest technology transaction ever, behind the SpaceX-xAI merger.
“Marvell has been on a decade-long journey to build a strong position in the core technologies powering the AI industry. This transaction marks a defining next step in that journey.” — Marvell chief executive officer Matt Murphy, speaking during a conference call
Deal faces a long completion timeline
The announcement came after a difficult week for technology stocks, when concerns about the durability of AI spending weighed on the industry. Shares of both Marvell and Lumentum fell on Monday, extending declines recorded late the previous week. The market reaction highlighted investor concerns about pursuing a large AI-related acquisition while confidence in the pace and sustainability of technology spending is unsettled.
The companies’ planned closing date also raises questions about the regulatory path. The transaction is not expected to be completed for more than a year, and the extended timetable suggests that securing clearance may be challenging. The report said analysts see limited opportunities for cost reductions between the two companies’ operations, adding another consideration to the proposed combination.
Key terms of the agreement
- Enterprise value: US$115 billion
- Equity value: About US$102.6 billion
- Ownership: Marvell shareholders would hold 67% of the combined company
- Expected completion: First half of 2028
The transaction illustrates the strategic importance of optical connectivity as data centers expand. Lumentum’s light-based components and Marvell’s chip technologies address different parts of the systems used to process and transfer data. The proposed merger would therefore extend beyond a conventional chip acquisition, bringing together processing-related products and the infrastructure that carries data between systems.
Marvell and Lumentum have not completed the transaction, and the agreement remains subject to the clearance process before the expected 2028 closing. Until then, the companies will remain separate businesses while seeking approval for one of the largest technology combinations announced in the year.
