Marvell and Lumentum both slide after $115 billion all-stock merger deal

Marvell Technology agreed to acquire optical-components maker Lumentum in an all-stock transaction with an implied enterprise value of $115 billion, one of the largest technology deals on record. The market's first verdict was negative for both sides: Marvell fell 12.40% to $172.01 and Lumentum dropped 18.13% to $688.76 in afternoon trading.

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Under the terms, Lumentum holders receive a fixed 4.500 Marvell shares for each Lumentum share. The companies put the implied value at about $1,132 per Lumentum share, a premium of roughly 23.9% to unaffected prices as of October 28, before deal speculation began. Because the ratio is fixed and there is no cash, the deal's value moves with Marvell's stock, which is why Monday's slide in the acquirer also weighed on the target. After closing, Marvell holders would own about 67% of the combined company and Lumentum holders about 33%.

The pitch is AI data-center plumbing. Marvell says the combination creates a full-stack connectivity portfolio, expands its addressable market to $550 billion, and offers line of sight to more than $1 billion in annual run-rate cost synergies, with the deal expected to be accretive to non-GAAP earnings per share in year one. The move steps up Marvell's challenge to larger rival Broadcom as hyperscaler spending on optical links keeps outrunning supply.

The wait is long. Closing is expected in the first half of 2028, pending shareholder and regulatory approvals. Matt Murphy stays chairman and CEO, and three Lumentum directors, including CEO Michael Hurlston, join Marvell's board. Expect antitrust review and the spread between Lumentum and 4.500 Marvell shares to be the trade to watch from here.