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Marvell to buy Lumentum in $115 billion all-stock deal
The deal is expected to close in the first half of 2028.
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Marvell Technology Inc. has signed a definitive merger agreement to acquire Lumentum for an enterprise value of $115 billion, combining two of the biggest players in the data center optics market into one company. According to a joint press release on November 2nd, Lumentum shareholders will receive 4.5 Marvell shares for each share they own, which the companies put at about $1,132 per share. This figure represents a 23.9% premium over the company's unaffected closing price on October 28, the last trading day before reports of the deal affected prices.
The agreement — which leaves Marvell's current shareholders with about 67% of the combined company and Lumentum's with about 33% — is reportedly the second-largest tech transaction deal ever after the SpaceX-xAI merger, according to Bloomberg. Both boards have approved the deal unanimously, and it is expected to close in the first half of 2028, pending regulatory and shareholder approval.
The acquisition represents another significant expansion of Marvell's optical infrastructure portfolio, following its $10 billion acquisition of Inphi in 2021 and its $3.5 billion upfront purchase of optical interconnect startup Celestial AI, completed in February 2026. All three mergers and acquisitions involved companies handling different parts of one of the most critical AI infrastructures: optical connectivity.
As AI infrastructure continues to scale, optical connectivity is becoming increasingly important for moving vast amounts of data between processors, racks, data centers, and even on the accelerator board itself. With the acquisition of Lumentum, Marvell, which already supplies optical DSPs, silicon photonics, and high-speed SerDes, is positioning itself as one of the industry's major suppliers of optical interconnect technologies, spanning scale-across and scale-out networking to emerging scale-up and scale-in connections.
Modern AI data centers house thousands of interconnected accelerators exchanging enormous volumes of data. As data volume, speed, and travel distance scale, copper interconnects, the conventional medium for inter-rack connections, hit physical limits, becoming impractical at around one to two meters. The industry's solution has been a transition to optics, moving data as light instead of electrical signals.
First, optical transceivers and fiber optics replaced copper for inter-rack connections and beyond. Pluggable transceivers containing a laser chip, digital signal processor (DSP) chips, and several optical components convert the accelerator's electrical signals into light for transmission over fiber, then convert them back into electrical signals at the receiving end.
The industry is also looking to bring optics into the accelerator package itself with co-packaged optics and near-packaged optics. In conventional packages, signals from the logic chip have to travel inches along copper traces across the board to reach the transceiver. Co-packaged optics takes the optical engine out of the pluggable module and places it as a photonic integrated circuit (PIC) chip directly on the switch or accelerator package, shrinking the electrical path.
These shifts to optics have made optical interconnects one of the most critical AI infrastructure markets, driving several multi-billion-dollar deals and major partnerships among industry players across the different technologies and processes involved.