Marvell and Lumentum to Combine, Creating a Category Leader in AI Connectivity

Summary:

• Combines two of the fastest-growing enablers of AI, bringing together complementary electrical and optical technologies to address increasingly complex connectivity requirements across next-gen AI infrastructure
• Expected to create a broad full-stack connectivity portfolio that is intended to enable end-to-end extreme co-design, high-volume production of fully-optimized, pre-validated optical solutions and faster time to market for customers
• Expected to expand the combined company’s total addressable market to $550 billion
• The transaction is expected to enhance the combined company’s long-term revenue growth, non-GAAP gross margin and non-GAAP operating margin profile, provide line of sight to more than $1 billion in annual run-rate cost synergies, and is expected to be accretive to Marvell non-GAAP earnings per share in year one post-close

Marvell Technology, Inc. and Lumentum announced that they have entered into a definitive agreement for Marvell to acquire Lumentum in an all-stock transaction.Under the terms of the agreement, Lumentum stockholders will receive a fixed exchange ratio of 4.500 shares of Marvell common stock for each share of Lumentum common stock they own.

The transaction has an implied enterprise value of $115 billion for Lumentum, representing approximately $1,132 per share of Lumentum common stock and a premium of approximately 23.9% based on each company’s unaffected closing share price as of October 28, 2026, the last trading day before market speculation regarding a potential transaction began. Post-closing, current Marvell stockholders will own approximately 67% of the combined company on a fully diluted basis, while Lumentum stockholders will own approximately 33%.

The AI infrastructure industry is at an inflection point. Rapidly growing bandwidth requirements and the physical limitations of copper-based connectivity are accelerating the transition toward optical technologies. As AI infrastructure scales to increasingly complex architectures, particularly scale-up and scale-in, the industry is shifting from discrete, modular components toward highly integrated optical solutions that require much closer co-design of electrical and optical technologies to deliver greater bandwidth, performance and energy efficiency.

The combination brings together best-in-breed technology to meet this need, joining Marvell’s strengths in electrical and optical interconnect, network switching, custom XPU and XPU attach and advanced semiconductor technologies with Lumentum’s expertise in high-performance lasers, optical transceivers, optical circuit switching (OCS) and specialized compound semiconductor manufacturing. Following closing, the combined company is expected to offer a highly complementary portfolio spanning leading-edge CMOS, silicon photonics, compound semiconductors, advanced packaging and manufacturing capabilities. The combination is intended to enable deeper integration and co-design across the electrical and optical signal chain, positioning Marvell to deliver highly optimized connectivity solutions across a wide range of distances, from distributed data centers to connections within advanced semiconductor packages.

“AI infrastructure is undergoing a fundamental architectural shift toward optical connectivity, creating an opportunity that comes along once in a generation,” said Matt Murphy, chairman and CEO, Marvell. “The companies that move first and help define this transition will set the standard for decades to come. By bringing together two leaders with highly complementary technologies, exceptional talent and specialized manufacturing capabilities, we intend to help shape the next era of AI connectivity and create exceptional stockholder value.”

“Joining Marvell creates a company uniquely positioned to capitalize on a market opportunity of $550 billion and generate significant, sustainable stockholder value,” said Michael Hurlston, president and CEO, Lumentum. “Surging AI data traffic requires rapid hardware innovation, and this combination enhances our ability to deliver next-gen solutions at scale. Together with Marvell, we will meet our customers’ complete interconnect needs, spanning scale-across and scale-out today to scale-up and scale-in domains tomorrow. By offering extreme co-design around our customers’ demanding requirements, we will help them achieve faster time to market, accelerated innovation cycles and category-defining performance.”

Compelling Strategic and Financial Rationale
The combination is expected to deliver substantial strategic and financial benefits:

• Creates a category leader in AI connectivity: Combining Marvell’s electrical and optical interconnect, switching and custom silicon technologies with Lumentum’s high-performance lasers, optical transceivers and OCS capabilities will create a comprehensive connectivity portfolio spanning scale-across, scale-out, scale-up and scale-in. Upon closing, the combined company anticipates being positioned to address customer connectivity requirements across a broad range of distances and topologies, from distributed data centers to advanced semiconductor packages
• Enables end-to-end extreme co-design and accelerates customer innovation: As AI infrastructure becomes increasingly complex, customers require higher levels of integration and optimization across digital, analog and optical technologies. By bringing together complementary technologies and engineering expertise across the signal chain, the combined company expects to be positioned to develop highly-optimized, pre-validated optical solutions designed to improve bandwidth, performance and power efficiency, accelerate customer time to market and support high-volume production
• Combines highly specialized manufacturing capabilities and enhances R&D resources: Lumentum brings advanced compound semiconductor manufacturing and process technologies, including indium phosphide (InP), as well as high-speed and high-power laser capabilities. After closing, the combined company plans to bring together leading-edge semiconductor design, advanced packaging and specialized manufacturing capabilities to enable deeper heterogeneous integration, strengthen strategic supply and accelerate the development of next-generation optical technologies
• Creates significant long-term stockholder value: The combination brings together two of the fastest-growing companies enabling AI infrastructure and expands the combined company’s total addressable market to $550 billion and enhances the combined company’s ability to serve customers in emerging scale-up and scale-in markets. The transaction is expected to enhance the combined company’s long-term revenue growth, non-GAAP gross margin and non-GAAP operating margin profile, provide line of sight to more than $1 billion in annual run-rate cost synergies and is expected to be accretive to Marvell non-GAAP earnings per share in year one post-close

Under the terms of the agreement, which has been unanimously approved by the boards of directors of both companies, Lumentum stockholders will receive a fixed exchange ratio of 4.500 shares of Marvell common stock for each share of Lumentum common stock held at the time of closing, implying pro forma ownership of approximately 33% of the combined company for Lumentum stockholders on a fully diluted basis.

Following closing, Matt Murphy will continue as chairman and CEO of the combined company. As part of the transaction, three members of Lumentum’s Board of Directors, including Lumentum CEO Michael Hurlston, will join Marvel’s Board, which currently consists of seven directors.

The transaction is expected to close in the first half of calendar year 2028, subject to approval by Marvell and Lumentum stockholders, receipt of regulatory approvals and other customary closing conditions.

Marvell Reports Preliminary Revenue for the Fiscal Third Quarter 2027 and Lumentum Issues Fiscal First Quarter 2027 Results
In connection with this announcement, Marvell reported preliminary revenue for the third quarter of fiscal 2027 consistent with previously provided guidance, maintaining the midpoint of its prior guidance while narrowing the expected range to plus or minus 2%, compared with the original range of plus or minus 5%.

Lumentum separately reported financial results for its first fiscal quarter of 2027.

Advisors
Qatalyst Partners is serving as lead financial advisor and J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC are serving as financial advisors to Marvell. Wilson Sonsini Goodrich & Rosati is serving as legal advisor to Marvell, and FGS Global is serving as strategic communications advisor. Citigroup Global Markets Inc. and Evercore are serving as financial advisors to Lumentum, Davis Polk & Wardwell LLP is serving as legal advisor and Joele Frank, Wilkinson Brimmer Katcher is serving as strategic communications advisor.