Marvell to buy Lumentum in $115 billion all-stock deal to own AI's optical layer

The AI build-out just produced one of the largest chip deals of the year. Marvell Technology agreed to buy optical-components maker Lumentum in an all-stock transaction with an implied enterprise value of $115 billion, the companies announced on Nov. 2, 2026.

Lumentum stockholders will receive a fixed 4.500 Marvell shares for each Lumentum share. That equals about $1,132 per share, a premium of about 23.9% to each company's unaffected closing price on Oct. 28, 2026, the last trading day before deal speculation began, according to Marvell's release.

Why Marvell wants optics

The thesis is co-design. AI clusters increasingly rely on optical links to connect chips, and Marvell says combining its electrical technology with Lumentum's optics creates a full-stack connectivity portfolio. The companies say the deal expands their total addressable market to $550 billion and gives "line of sight" to more than $1 billion in annual run-rate cost synergies. They expect it to add to Marvell's non-GAAP earnings per share in the first year after closing.

"You need scale-up technology that needs semiconductors and optical working seamlessly together," Marvell CEO Matt Murphy told CNBC. Murphy will remain chairman and CEO, and three Lumentum directors, including CEO Michael Hurlston, will join Marvell's board.

The market's verdict: not so fast

Because the ratio is fixed and there is no cash, the final value depends on Marvell's share price. On the day of the announcement, Marvell shares slumped 13% and Lumentum fell nearly 19%, CNBC reported. Both stocks had been big winners: Marvell more than doubled over the prior year and Lumentum roughly quadrupled.

The deal needs approval from both companies' stockholders plus regulators and is expected to close in the first half of 2028.