Marvell to Acquire Lumentum in All-Stock Deal to Expand AI Optical Interconnect Portfolio
Marvell Technology has announced a definitive agreement to acquire optical communications manufacturer Lumentum in an all-stock deal valuing the transaction at approximately $115 billion. The merger aims to integrate Marvell's electrical/optical interconnect and custom XPU technologies with Lumentum's high-performance lasers, optical transceivers, and compound semiconductor capabilities, creating a comprehensive AI infrastructure connectivity solution from data centers to chip packaging. The deal is expected to close in the first half of 2028, expanding the combined company's target market to $550 billion.
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IT Home reported on November 2 that Marvell Technology and optical communications equipment manufacturer Lumentum announced today that they have reached a definitive acquisition agreement. Marvell will acquire Lumentum in an all-stock transaction with an implied enterprise value of approximately $115 billion (equivalent to about RMB 765.998 billion at the current exchange rate), corresponding to approximately $1,132 per Lumentum share (equivalent to about RMB 7,540 at the current exchange rate). This represents a premium of approximately 23.9% over the closing prices of both companies' stocks on October 28, 2026, prior to being affected by rumors of a potential deal.
Under the terms of the agreement, Lumentum shareholders will receive 4.5 shares of Marvell common stock for each share held. Upon completion of the transaction, existing Marvell shareholders will own approximately 67% of the combined company, while Lumentum shareholders will hold approximately 33%. The transaction is expected to close in the first half of 2028, subject to approval by both companies' shareholders and regulatory authorities.
Marvell expects the merger to generate annual cost synergies exceeding $1 billion (Note from IT Home: equivalent to about RMB 6.661 billion at the current exchange rate) and anticipates accretion to non-GAAP earnings per share in the first year following the transaction's completion. The target market size for the combined entity is projected to expand to $550 billion (equivalent to about RMB 3.66 trillion at the current exchange rate).
Marvell and Lumentum plan to integrate their respective technologies in the field of AI infrastructure connectivity. Marvell possesses expertise in electrical and optical interconnects, network switching, custom XPUs, and advanced semiconductor technologies, while Lumentum offers high-performance lasers, optical transceivers, Optical Circuit Switching (OCS), and compound semiconductor manufacturing capabilities. Post-merger, the combined company will cover areas including CMOS, silicon photonics, compound semiconductors, advanced packaging, and manufacturing, providing optical interconnect solutions ranging from distributed data centers to within advanced semiconductor packages.
Lumentum also released its financial results for the first quarter of fiscal year 2027 today. For the period ended September 26, the company reported revenue of $1.263 billion (equivalent to about RMB 8.413 billion at the current exchange rate), representing a year-over-year increase of 136.5%. Net income was $360 million (equivalent to about RMB 2.398 billion at the current exchange rate), compared to $4.2 million (equivalent to about RMB 27.976 million at the current exchange rate) in the same period last year. Non-GAAP net income was $461 million (equivalent to about RMB 3.071 billion at the current exchange rate), with diluted earnings per share of $4.57 (equivalent to about RMB 30.40 at the current exchange rate). The company forecasts second-quarter revenue between $1.575 billion and $1.625 billion (equivalent to about RMB 10.491 billion to RMB 10.824 billion at the current exchange rate), with non-GAAP diluted earnings per share between $5.90 and $6.20 (equivalent to about RMB 39.30 to RMB 41.30 at the current exchange rate). The company stated that pump lasers and Optical Circuit Switches (OCS) were the primary drivers of this quarter's performance growth. Additionally, Lumentum has secured a second large-scale NPO/CPO order, with purchase commitments exceeding $5 billion (equivalent to about RMB 33.304 billion at the current exchange rate).
Marvell announced preliminary revenue expectations for the third quarter of fiscal year 2027, projecting that revenue will align with the midpoint of previous guidance. The company narrowed its revenue forecast range to ±2%, down from the previous range of ±5%. Marvell noted that final results remain subject to quarterly closing procedures and audit reviews.