Marvell bulks up via $115 billion Lumentum acquisition

Marvell will acquire Lumentum in a deal valued at $115 billion. The combined company will have a full AI infrastructure stack that will combine processors and optical networking and could challenge Broadcom.

According to Marvell, Lumentum will expend the combined company's total addressable market to $550 million, create $1 billion in annual savings and boost non-GAAP earnings.

Lumentum shareholders will get 4.5 Marvell shares for each share owned. The deal works out to $1,132 per Lumentum share. When the deal closes, Marvell shareholders will own 67% of the combined company with Lumentum shareholders getting the remainder.

Marvell was emerging as a key player in co-designing XPUs with customers such as Google. Lumentum will bring optical transceivers and optical switching to complement's Marvell's electrical and optical interconnect, network switching and chip knowhow.

Matt Murphy, CEO of Marvell, said the combination will "help shape the next era of AI connectivity." Michael Hurlston, CEO of Lumentum, said the deal will help the company scale product and innovation cycles.

The combined company, which will have $17.7 billion in annual revenue, will be among the largest AI infrastructure players and in the top 5 in terms of revenue.