Marvell has agreed to buy optical chip and networking equipment maker Lumentum in an all-stock transaction. The Marvell Lumentum deal carries an enterprise value of $115 billion including debt, with an equity value of roughly $80 billion, according to TechCrunch.
Under the terms, Lumentum shareholders will receive 4.5 shares of Marvell common stock for every Lumentum share they hold. No cash changes hands. As a result, the price Lumentum investors end up with depends on where Marvell stock trades between now and closing.
How the Marvell Lumentum deal compares
The figure puts the acquisition among the largest in tech history. For gaming readers, the nearest reference point is Microsoft and Activision Blizzard. Microsoft agreed to that $68.7 billion purchase in 2022, and it took until late 2023 to close after regulators in the US, UK and EU examined it.
Another large comparison is Dell, which bought storage company EMC for $67 billion in 2016. On enterprise value, the Marvell agreement is well above both. Its equity value of about $80 billion is also higher than either earlier deal.
Still, the two numbers measure different things. Enterprise value folds in the debt Marvell takes on, while the equity figure reflects what Lumentum shareholders receive in Marvell stock.
Nvidia already owns a piece of both companies
The two companies share a major shareholder in Nvidia. In March, Nvidia invested $2 billion in Lumentum as part of a multi-year agreement to buy the company’s advanced laser components. That money goes toward Lumentum’s research and development and the expansion of its fabrication capacity.
Later the same month, Marvell announced its own $2 billion investment from Nvidia. That funding targets Marvell’s optical networking and chip portfolio. In other words, the GPU maker now holds stakes on both sides of the merger.
Optical parts move data between servers and racks using light instead of copper. Large AI training clusters link thousands of GPUs this way, so the speed of those links affects how fast the whole system runs.
What Marvell says it gains
Marvell designs custom chips and data infrastructure silicon for large cloud companies. Lumentum builds lasers and optical components used in data center networking. With the Marvell Lumentum deal, Marvell says the combined business will lead in AI connectivity, with products that range from individual chips up to data center equipment.
Meanwhile, the companies have not yet cleared the approvals needed to finish the merger. Shareholders at both Marvell and Lumentum must vote in favor. Regulators also have to sign off, and the Activision case showed how long that review can run for a deal of this size.
For the Marvell Lumentum deal, the companies have set a long runway. They expect the transaction to close in the first half of calendar year 2028, roughly 18 months or more after the announcement.
Until then, Marvell and Lumentum continue to operate as separate public companies, with Nvidia holding a stake in each.