Just now, Marvell acquired Lumentum at a total price of 115 billion US dollars.

It is reported that Marvell has reached an agreement to acquire Lumentum, a data center optical equipment manufacturer, at an enterprise value of 1.15 trillion US dollars. This is one of the largest technology M&A deals in history, designed to profit from the artificial intelligence boom.

According to data compiled by Bloomberg, in terms of equity value, this is the largest M&A transaction of this year, and also the largest M&A transaction in the global technology industry in history (excluding SpaceX's acquisition of xAI). This deal shows that artificial intelligence is driving M&A transactions in almost all major industries and regions, ranging from chip manufacturers and other professional technology suppliers to data center operators and power companies, without exception.

Lumentum's stock price closed at $840.70 on Friday, up 128% cumulatively since the beginning of this year. The San Jose-based company has a market value of about $760 billion. Marvell's stock price has risen 131% cumulatively this year, with a market value of $1.722 trillion as of Friday.

Lumentum manufactures lasers and other optical technologies for high-speed transmission of massive amounts of data. These hardware are the foundation of the booming artificial intelligence development, as they enable data centers and telecommunications companies to transmit information between servers, facilities and other destinations.

Marvell has purchased laser technology from Lumentum, and this larger company has been increasing investment in optical and photonic technologies used to connect data center equipment. Earlier this year, Marvell acquired Celestial AI, a manufacturer of photonic devices.

Marvell Merges with Lumentum

Marvell and Lumentum announced today that they have reached a final agreement under which Marvell will acquire Lumentum through an all-stock transaction. According to the terms of the agreement, each share of Lumentum common stock held by Lumentum shareholders will receive a fixed exchange ratio of 4.500 shares of Marvell common stock. This transaction implies an enterprise value of $1.15 trillion for Lumentum, equivalent to approximately $1,132 per share of Lumentum common stock, representing a premium of about 23.9% over the unaffected closing prices of the two companies as of October 28, 2026, the last trading day before the market began to speculate on the potential transaction. After the transaction is completed, existing Marvell shareholders will hold approximately 67% of the shares of the combined company (on a fully diluted basis), while Lumentum shareholders will hold approximately 33% of the shares.

The artificial intelligence infrastructure industry is at a turning point. The rapidly growing bandwidth demand and the physical limitations of copper cable connections are accelerating the transformation to fiber optic technology. As artificial intelligence infrastructure expands to increasingly complex architectures, especially for scale-out and scale-down scenarios, the industry is shifting from discrete modular components to highly integrated fiber optic solutions, which require closer co-design of electrical and optical technologies to achieve higher bandwidth, performance and energy efficiency.

This merger combines top-tier technologies in the two fields to meet market demands. Marvell's strengths in electrical and optical interconnection, network switching, custom XPU and XPU interconnection, and advanced semiconductor technologies are integrated with Lumentum's expertise in high-performance lasers, optical transceivers, optical circuit switching (OCS) and special compound semiconductor manufacturing. After the merger is completed, the combined company is expected to offer a highly complementary product portfolio covering leading CMOS, silicon photonics, compound semiconductors, advanced packaging and manufacturing capabilities. This merger aims to achieve deeper integration and co-design of the electrical and optical signal chains, enabling Marvell to provide highly optimized connectivity solutions covering various distances from distributed data centers to internal connections within advanced semiconductor packages.

"Artificial intelligence infrastructure is undergoing a fundamental architectural shift toward optical connectivity, creating a once-in-a-lifetime opportunity," said Matt Murphy, Chairman and CEO of Marvell. "Companies that take the lead and lead this transformation will set industry benchmarks for decades to come. By integrating two industry leaders with highly complementary technologies, exceptional talent and professional manufacturing capabilities, we aim to help shape the next era of AI connectivity and create superior value for our shareholders."

"By joining Marvell, Lumentum will be uniquely positioned to capture the $5.5 trillion market opportunity and deliver significant and sustainable value for shareholders," said Michael Hurlston, President and CEO of Lumentum. "The surge in AI data traffic requires rapid hardware innovation, and this merger will enhance our ability to deliver next-generation solutions at scale. Together with Marvell, we will meet customers' comprehensive interconnection needs, covering today's scale-out and scale-up scenarios, as well as future scale-up and scale-integration scenarios. By providing deep co-design around customers' stringent requirements, we will help them bring products to market faster, accelerate innovation cycles, and achieve industry-leading performance."

Compelling Strategic and Financial Rationale

This merger is expected to deliver significant strategic and financial benefits:

• This merger will build a leading player in the AI connectivity field: The combination of Marvell's electrical and optical interconnection, switching, and custom silicon technologies with Lumentum's high-performance lasers, optical transceivers and OCS capabilities will build a comprehensive connectivity product portfolio covering scale-out, scale-up, scale-in and scale-down scenarios. After the merger is completed, the combined company is expected to be able to meet customers' connectivity needs under various distances and topologies, applicable from distributed data centers to advanced semiconductor packages.
• Realize end-to-end in-depth co-design to accelerate customer innovation: As artificial intelligence infrastructure becomes increasingly complex, customers need higher levels of integration and optimization of digital, analog and fiber optic technologies. By integrating complementary technologies and engineering expertise across the signal chain, the combined company is expected to develop highly optimized, pre-validated fiber optic solutions designed to improve bandwidth, performance and energy efficiency, speed up customer product launch, and support mass production.
• This acquisition integrates highly specialized manufacturing capabilities and enhances R&D resources: Lumentum brings advanced compound semiconductor manufacturing and process technologies, including indium phosphide (InP), as well as high-speed and high-power laser technologies. After the transaction is completed, the combined company plans to integrate leading semiconductor design, advanced packaging and professional manufacturing capabilities to achieve deeper heterogeneous integration, strengthen strategic supply, and accelerate the development of next-generation optical technologies.
• This merger will create significant long-term value for shareholders: The two merged companies are among the fastest-growing enterprises in the artificial intelligence infrastructure field. After the merger, the total addressable market size of the combined company will expand to 5500 billion US dollars, and its ability to serve customers in emerging large-scale markets will be enhanced. This transaction is expected to boost the long-term revenue growth, non-GAAP gross profit margin and non-GAAP operating profit margin of the combined company, and is expected to achieve annual cost synergies of more than 1 billion US dollars, while it is expected to increase Marvell's non-GAAP earnings per share in the first year after the transaction is completed.

Transaction Structure and Terms

According to the terms of the agreement unanimously approved by the boards of directors of both companies, Lumentum shareholders will receive a fixed exchange ratio of 4.500 shares of Marvell common stock for each share of Lumentum common stock held at the closing of the transaction, which means that Lumentum shareholders will hold approximately 33% of the shares of the combined company on a fully diluted basis.

After the transaction is completed, Matt Murphy will continue to serve as the Chairman and CEO of the combined company. As part of the transaction, three members of Lumentum's board of directors, including Lumentum CEO Michael Hurlston, will join Marvell's board of directors, which currently consists of seven directors.

The transaction is expected to be completed in the first half of 2028, subject to the approval of Marvell and Lumentum shareholders, regulatory approvals and other customary closing conditions.

Marvell Announces Preliminary Revenue for Q3 of Fiscal 2027, Lumentum Releases Financial Results for Q1 of Fiscal 2027

In conjunction with today's announcement, Marvell announced its preliminary revenue for the third quarter of fiscal 2027 today, which is consistent with the previously provided guidance, maintains the midpoint of the previous guidance, and narrows the expected range to plus or minus 2%, while the original range was plus or minus 5%.

This article is from the WeChat official account "Semiconductor Industry Watch", and is published by 36Kr with authorization.