Marvell Technology has agreed to acquire optical equipment maker Lumentum in an all-stock transaction. The combination aims to link semiconductor and photonics technologies for data centers.
Marvell Technology agreed Monday to acquire optical equipment maker Lumentum Holdings in an all-stock transaction valued at $115 billion, combining two major suppliers for artificial intelligence computing systems. The acquisition marks the largest merger between two publicly traded companies, Fox News reported, and stands among the biggest corporate transactions in technology industry history, according to CBS News.
Under the terms of the agreement, Lumentum shareholders will receive 4.5 shares of Marvell common stock for each share they own. The announcement prompted an immediate slide in trading, with Marvell shares falling more than 1% before the opening bell and Lumentum sliding nearly 3%. The drop followed an aggressive pullback in artificial intelligence stocks last week. Even so, Marvell leadership argued that the acquisition remains warranted as tech companies expand computing capacity to handle larger data workloads.
Combining chips with optical technology
Marvell, founded in 1995, develops data infrastructure semiconductors and artificial intelligence chips that power data centers, holding a market valuation of roughly $172 billion. Lumentum, valued at approximately $76 billion, manufactures lasers, circuit switches, and other optical equipment that transmit data between chips and servers using light. Both companies maintain their headquarters in Northern California, and executives said the two businesses share a vision for uniting semiconductor electronics with photonics hardware.
Marvell said the merger will join the companies’ complementary engineering teams and technologies to create an end-to-end system that serves expanding customer needs. Marvell Chairman and Chief Executive Matt Murphy described the transaction as a rare opportunity to pair top leaders from both sectors to establish a category leader in AI connectivity. In a corporate statement, Murphy said, “The companies that move first and help define this transition will set the standard for decades to come.” He added on ‘The Claman Countdown’ that connectivity between chips will become as consequential as computing processors, memory chips, manufacturing fabrication, and technology licensing.
Backing from Nvidia and hyperscalers
Artificial intelligence chip designer Nvidia holds strategic investments in both companies, including a $2 billion stake in Lumentum that it agreed to purchase earlier this year, according to Bloomberg reporting cited by CBS News. Lumentum Chief Executive Michael Hurlston said Murphy conferred with Nvidia Chief Executive Jensen Huang early in the acquisition process, receiving positive feedback. Hurlston told Fox Business that the combined supplier will be positioned to deliver hardware to Nvidia faster than the two firms could manage on their own.
Murphy told Fox Business that the merger has also secured strong backing from hyperscale data center operators. He said the unified company expects to generate significant revenue synergies and other operational benefits. Speaking alongside Murphy on television, Hurlston pointed to strong performance at both businesses, saying, “we’re gonna do much better together in two years than we would on a standalone basis.”
What happens next
The transaction requires approval from stockholders at both firms and is expected to close in the first half of 2028. The multiyear process unfolds as competition heats up to build next-generation artificial intelligence infrastructure, alongside concerns about centralized technological power. The deal also coincides with a rapid buildout of data centers across the United States, an expansion that has generated community backlash in multiple regions nationwide.
