Marvell Technology has agreed to acquire optical components maker Lumentum in an all-stock deal valued at USD 115 billion, including debt, as the US chipmaker looks to strengthen its position in the artificial intelligence (AI) infrastructure market and compete with larger rival Broadcom.
Announced on November 2, the acquisition is among the biggest corporate transactions of 2026 and reflects growing expectations that investments in AI infrastructure will continue to drive demand for advanced semiconductor and optical technologies.
The deal combines the strengths of Marvell in designing custom chips and networking technology with those of Lumentum in providing high-performance photonic components and lasers for use in artificial intelligence, cloud computing and communications networks.
The chipmaker expects the surge in spending on AI solutions driven by the world's leading tech giants to fuel demand for optical components capable of facilitating fast data transmission.
"Infrastructure supporting AI is undergoing a fundamental transformation towards optical connectivity and represents a generational opportunity," said Matt Murphy, the CEO of Marvell. He will remain chairman and CEO of the combined company.
The deal also strengthens Marvell's position against Broadcom, which has established itself as a major supplier of AI data centre hardware and Google's main custom-chip partner.
In the deal, Marvell will exchange 4.5 shares of Marvell’s stock in exchange for one share of Lumentum, valuing the latter at USD 1,132 per share. This proposal comes with a 23.9% premium compared to the unaffected market closing price of Lumentum’s share on October 28, prior to any information about the deal.
This will give Lumentum an equity value of USD 102.54 billion. In addition, the total value of the transaction including debts is valued at USD 115 billion. Lumentum stockholders will hold around 33% in the new entity on a fully diluted basis.
Both parties’ boards have agreed to the deal, which is expected to complete within the first half of 2028.
If Marvell’s board withdraws from the deal or accepts any other takeover offer, it will owe Lumentum a termination fee of USD 5.8 billion. Likewise, Lumentum owes Marvell USD 2.9 billion under the same situation. Marvell owes USD 3.2 billion if regulators deny the deal.
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Marvell said the acquisition would expand the combined company's total addressable market to USD 550 billion. Separately, Lumentum expects second-quarter revenue of USD 1.58 billion to USD 1.63 billion, above analysts' average estimate of USD 1.48 billion, according to LSEG data.
Lumentum could also benefit from a proposed US ban on new Chinese optical transceivers, potentially shifting demand towards domestic suppliers.
Marvell recently completed its USD 3.5 billion purchase of Celestial AI in February. Its acquisition of Lumentum marks its largest purchase since the USD 10 billion buyout of Inphi in 2021.