Marvell Agrees to Buy Lumentum for $115 Billion in Stock, and Both Companies' Shares Slide

Marvell Technology agreed on Monday to buy Lumentum, the San Jose maker of lasers and optical transceivers, in an all-stock deal that values Lumentum at an enterprise value of $115 billion, the companies said. Lumentum holders will receive 4.5 Marvell shares for each of theirs, which was worth about $1,132 a share and a premium of roughly 23.9 percent on the two stocks' unaffected closing prices on 28 October.

The market's first verdict was harsh. Marvell closed down about 13 percent and Lumentum fell about 18.6 percent, The Motley Fool reported, on roughly 60 million Marvell shares traded, nearly three times the three-month average. Because the price is set in Marvell stock, every point Marvell loses shrinks what Lumentum's shareholders actually get.

What is Marvell buying, and why optical?

Lumentum makes the components that turn electrical signals into light and back: high-performance lasers, optical transceivers, optical circuit switches and the modules and subsystems that connect data centre and telecom networks. Marvell designs the high-speed networking silicon and custom chips that let AI accelerators talk to one another, and competes with Broadcom in that business.

Marvell's chairman and chief executive, Matt Murphy, said in the release that AI infrastructure is shifting toward optical connectivity, and the pitch to investors is that owning the lasers as well as the chips puts the combined company on both sides of that shift. Lumentum's chief executive, Michael Hurlston, pointed to a combined addressable market the companies put at $550 billion. Yahoo Finance noted that the deal also hands Marvell optical manufacturing capacity, which has become one of the bottlenecks of the AI build-out.

Why did Marvell and Lumentum stock fall?

Three reasons, according to the day's coverage: dilution, valuation and execution. Marvell holders will own about 67 percent of the combined company and Lumentum holders about 33 percent on a fully diluted basis, so existing Marvell investors are giving up a third of a company whose shares had already risen more than 120 percent this year. Lumentum's own stock had more than doubled in 2026 before the announcement, so the premium is being paid on an elevated base.