Marvell Technology (MRVL) has agreed to acquire optical networking company Lumentum (LITE) in an all-stock transaction valued at approximately $115 billion in enterprise value, combining two major suppliers of AI infrastructure and optical networking technology. The announcement was made on Monday. Enterprise value — a company's market capitalization adjusted for its debt and cash — is a standard yardstick for measuring the full cost of a takeover.

Marvell stock closed at $196.40 on Friday, down $21.94, or 10.05%. In pre-market trading on Monday, shares traded up 0.56% at $197.50. Lumentum fell 8.57% in the same session. Both stocks have come under pressure since reports of the deal talks first surfaced late last month, with Lumentum down about 8% and Marvell roughly 22% over that span.

The broader selloff in chip stocks picked up speed after Intel issued a weak forecast, and both companies moved lower with the group.

On X, market news account Wall St Engine outlined the terms of the agreement as follows:

$MRVL TO ACQUIRE $LITE IN $115B ALL-STOCK DEAL

Marvell has agreed to acquire Lumentum in an all-stock transaction valued at approximately $115B in enterprise value, combining two major suppliers of AI infrastructure and optical networking technology.

Under the agreement: •… pic.twitter.com/JLi52vlJ49

— Wall St Engine (@wallstengine) November 2, 2026

Deal Terms

Under the terms of the all-stock agreement, Lumentum shareholders will receive a fixed 4.500 Marvell shares for each share of Lumentum stock they hold, implying a value of about $1,132 per Lumentum share. Because payment comes entirely in shares rather than cash, Lumentum's holders become shareholders of the combined company at closing. The exchange ratio represents a premium of approximately 23.9% to Lumentum's unaffected closing price on October 28, the last trading day before deal speculation began. Because the exchange ratio is fixed, the total consideration will not fluctuate with share-price movements before closing.

After closing, Marvell shareholders will own about 67% of the combined company, with Lumentum shareholders holding the remaining 33%. The boards of both companies approved the transaction unanimously. Matt Murphy will continue to serve as Chairman and CEO, while three Lumentum directors, including CEO Michael Hurlston, will join Marvell's seven-member board.

The deal requires approval from the stockholders of both companies as well as clearance from regulators — the milestones that stand between Monday's announcement and an expected close in the first half of calendar 2028.

Strategy and Numbers

Beyond the headline price, Marvell outlined the strategic rationale and financial targets it expects from the combination. The company said the acquisition expands its total addressable market to $550 billion and is expected to add to non-GAAP earnings per share in the first year after closing. Marvell also sees a line of sight to more than $1 billion in annual run-rate cost synergies — annualized savings measured once the integration is fully implemented — along with gains in long-term revenue growth and margins.

Murphy described the industry's shift toward optical connectivity as "an opportunity that comes along once in a generation." Hurlston said the pairing allows the two firms to meet customers' full interconnect needs.

Lumentum competes with Coherent and China's Zhongji Innolight in the optical transceiver market, and could benefit from a proposed US ban on new Chinese optical transceivers. Transceivers are the modules that convert electrical signals into light for transmission over fiber, the links that move data within and between data centers. The company is about half the size of Marvell. Earlier this year, Nvidia invested $2 billion in each of the two companies.

The transaction stands as Marvell's largest purchase since its $10 billion buyout of Inphi in 2021. In February, the company closed a separate $3.5 billion deal for Celestial AI.

Marvell's market value has climbed to more than $170 billion, and its stock hit a record high in June after Nvidia CEO Jensen Huang called it the next "trillion-dollar company." Annual revenue rose from $3 billion in fiscal 2021 to $8.2 billion in fiscal 2026. In August, Marvell signed a deal worth up to $120 billion in sales through fiscal 2033 to supply chips alongside Google's AI processors.

Source: CoinCentral