Marvell agreed to buy Lumentum in an all-stock deal, and shares of both companies fell Monday. Shareholders of both companies have criticized the offer, with one describing it as “a trash offer.”
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Original headline: Marvell and Lumentum shareholders unite in panning merger deal: ‘It’s a trash offer’
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- In one of the largest deals in tech history, Marvell buys Lumentum for $115B
Marvell, a custom chip designer, will acquire Lumentum in an all-stock deal with an enterprise value of $115 billion including debt and an equity value of about $80 billion, offering 4.5 Marvell shares for each Lumentum share. The deal ranks among the largest in tech history, compared with Microsoft's $68.7 billion purchase of Activision Blizzard in 2022 and Dell's $67 billion acquisition of EMC in 2016. Nvidia is a shared major shareholder: it invested $2 billion in Lumentum in March under a multi-year laser component agreement, and later that month invested $2 billion in Marvell. The transaction is expected to close in the first half of calendar 2028, subject to shareholder and regulatory approval.
- Marvell Slides 3%, Lumentum Drops 6% on $115 Billion All-Stock Merger Deal; Coherent Climbs 2%
Marvell Technology agreed to acquire Lumentum Holdings in an all-stock deal with an enterprise value of $115 billion. Each Lumentum share would convert into 4.5 Marvell shares, which Marvell says implies $1,132 per share and a 23.9% premium, with closing expected in the first half of calendar 2028. Marvell expects more than $1 billion in annual run-rate cost savings, and the combination would bring its chip design together with Lumentum's laser production for AI optical connectivity. Marvell fell 3% to $190.43 and Lumentum dropped 6% to $788.51, with Lumentum trading below the implied deal value, a gap the article says usually reflects doubts about Marvell stock as deal currency, the long road to closing and antitrust review. Lumentum's Q1 FY2027 revenue was $1.26 billion, compared with the $1.25 billion consensus.
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Marvell (MRVL) shares fell 14.05% over the past week to $196.40 after reports of a possible takeover of Lumentum (LITE), and Marvell has issued no official statement. Lumentum's market cap is about $76.2 billion versus about $172.2 billion for Marvell, and the article says a deal would be a heavy lift, possibly requiring new stock or debt on top of $4.96 billion in existing debt. Marvell raised its fiscal 2027 revenue outlook to roughly $12 billion and fiscal 2028 to about $18 billion, and the stock trades at 26x forward earnings. Of 46 analysts covering the stock, 8 rate it Strong Buy, 32 Buy, 6 Hold and none Sell, with a consensus target of $340.56 implying 73.4% upside. Risks cited include reliance on a few hyperscalers and a beta of 2.26, and the fiscal third-quarter report, measured against guidance of $3.15 billion revenue and $1.10 non-GAAP EPS, is the next checkpoint.
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According to Bloomberg, which cited unnamed sources, Marvell Technology is in advanced talks to buy Lumentum Holdings in an all-stock deal that could be announced as soon as next week, though the talks could still end without a transaction. Marvell is valued at around $196 billion and Lumentum at about $85 billion; if completed, the deal would give Marvell more control over optical technology used in AI data centres. Lumentum makes lasers and optical components for high-speed data transfer, and its CEO Michael Hurlston said its products are sold out through early 2029 and it may be unable to meet about 70% of demand for some products next year. Marvell already buys lasers from Lumentum, and an acquisition would give it more direct access to optical technology and manufacturing capacity.
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Marvell Technology (MRVL) shares fell 13.24% to $218.34 on Oct. 29, on trading volume of 40.4 million shares, about 87% above the three-month average of 21.6 million. The decline followed reports that Marvell is in advanced talks to acquire Lumentum Holdings, with investors weighing financing and integration risks. Sources say the deal could be an all-stock transaction and may be announced as early as next week, though no final agreement has been reached. The S&P 500 fell 0.31% to 7,720 and the Nasdaq Composite fell 1.38% to 26,185. At its Oct. 6 investor day, Marvell had raised its fiscal 2028 revenue outlook to $20 billion.
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