Marvell Strikes $115B Deal To Acquire Lumentum: CEO Sees ‘Once In A Generation’ Opportunity In AI Optical Shift

• The companies expect more than $1 billion in annual run-rate cost synergies.
• They forecast the deal will add to Marvell’s non-GAAP earnings per share in the first year after closing.
• Lumentum also reported $1.26 billion in first-quarter revenue, beating estimates.

Marvell (MRVL) on Monday announced a $115 billion all-stock deal to acquire Lumentum (LITE), with Marvell CEO Matt Murphy calling it a “once in a generation” deal.

“AI infrastructure is undergoing a fundamental architectural shift toward optical connectivity, creating an opportunity that comes along once in a generation,” said Murphy. “The companies that move first and help define this transition will set the standard for decades to come”

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MRVL stock was up around 1% in pre-market trade, paring earlier gains, while LITE stock gained as much as 2.5%. Both were among the top trending tickers on Stocktwits at the time of writing. Retail sentiment around Marvell trended in ‘bullish’ territory over the past day, while sentiment around Lumentum trended in ‘extremely bullish’ territory.

Lumentum Holders To Get 4.5 MRVL Shares Per LITE Stock

The companies said the combination would create a leader in connectivity for artificial intelligence data centers by joining Marvell’s chips and electrical connections with Lumentum’s lasers and optical parts, which move data using light.

Under the new deal, Lumentum shareholders will receive 4.500 shares of Marvell for each Lumentum share they own. The companies said the exchange ratio implies a price of about $1,132 per Lumentum share, a premium of about 23.9%.

After the deal closes, Marvell shareholders will own about 67% of the combined company and Lumentum shareholders about 33%, on a fully diluted basis. The boards of both companies approved the deal unanimously.

Murphy will remain chairman and CEO. Three Lumentum directors, including CEO Michael Hurlston, will join Marvell’s board, which currently has seven members.

Deal Targets More Than $1B In Annual Cost Synergies

The companies said they see “line of sight to more than $1 billion in annual run-rate cost synergies.” They also said they expect the deal to improve the combined company’s long-term revenue growth and its non-GAAP gross and operating margins.

The companies said the deal is expected to add to Marvell’s non-GAAP earnings per share in the first year after closing, expected in the first half of calendar 2028.

Marvell Reaffirms Revenue Outlook, Lumentum Reports $1.26B Revenue 

Alongside the deal announcement, Marvell reported preliminary third-quarter (Q3) revenue in line with its previous guidance. In August, the company forecast revenue of $3.15 billion, plus or minus 5%. It maintained the midpoint of that outlook while narrowing the expected range to plus or minus 2%.

Lumentum separately reported first-quarter (Q1) revenue of $1.26 billion, slightly above the $1.25 billion consensus estimate as per Koyfin. Hurlston said the company recorded growth across all its businesses, led by pump lasers and optical circuit switches. He also said Lumentum secured its second major NPO/CPO win, backed by purchase commitments exceeding $5 billion.

Hurlston added that the company’s visibility into demand for optical circuit switches has expanded in recent months, stating that the technology could become a multibillion-dollar annual revenue stream. Lumentum also continued to see strength in its cloud modules business, with improving gross margins.

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