Marvell shares drop 12.8% after the $115 billion Lumentum deal

Marvell (MRVL) said on Nov. 2 that it has agreed to buy Lumentum (LITE) in an all-stock transaction with an implied enterprise value of $115 billion, according to a regulatory filing.

Shares fell 12.8% in regular trading as of 3:59 p.m. ET, from a regular-session close of $196.40.

Lumentum stockholders will receive a fixed exchange ratio of 4.500 Marvell shares for each Lumentum share they own. The implied price is about $1,132 per Lumentum share, a premium of approximately 23.9% based on each company’s unaffected closing share price as of Oct. 28, 2026, the last trading day before market speculation about a potential transaction began.

After closing, current Marvell stockholders will own about 67% of the combined company on a fully diluted basis. Lumentum stockholders will own about 33%.

The company said the combination is expected to create a broad full-stack connectivity portfolio spanning scale-across, scale-out, scale-up and scale-in. The combination brings together Marvell’s electrical and optical interconnect, switching and custom silicon technologies with Lumentum’s high-performance lasers, optical transceivers and optical circuit switching capabilities.

“AI infrastructure is undergoing a fundamental architectural shift toward optical connectivity, creating an opportunity that comes along once in a generation,” said Matt Murphy, Chairman and CEO of Marvell. “The companies that move first and help define this transition will set the standard for decades to come.”

“Joining Marvell creates a company uniquely positioned to capitalize on a market opportunity of $550 billion,” said Michael Hurlston, President and CEO of Lumentum.

The companies expect the deal to enhance the combined company’s long-term revenue growth, non-GAAP gross margin and non-GAAP operating margin. Marvell said it has line of sight to more than $1 billion in annual run-rate cost synergies.

The deal is expected to be accretive to Marvell non-GAAP earnings per share in year one after closing. The companies say the combined total addressable market expands to $550 billion.

Matt Murphy will continue as Chairman and CEO of the combined company. Three Lumentum directors, including Hurlston, will join Marvell’s board, which currently has seven directors.

The transaction is expected to close in the first half of calendar 2028. It is subject to approval by stockholders of both companies, receipt of regulatory approvals and other customary closing conditions.

In the same announcement, Marvell reported preliminary revenue for its fiscal third quarter of 2027, consistent with previously provided guidance. The company maintained the midpoint of its prior guidance and narrowed the expected range to plus or minus 2%, from plus or minus 5%.

In its Aug. 27 guidance, Marvell expected net revenue of $3.150 billion, plus or minus 5%.

These preliminary results are unaudited and remain subject to completion of quarter-end closing procedures and review by its independent registered public accounting firm. The quarter ended Oct. 31, 2026.

Lumentum separately reported results for its fiscal first quarter of 2027.

The companies planned a joint conference call at 8:00 a.m. Eastern Time on Nov. 2 to discuss the transaction. The call was to be webcast on Marvell’s investor relations website.

Qatalyst Partners is lead financial advisor to Marvell, with J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC as financial advisors. Citigroup Global Markets Inc. and Evercore are financial advisors to Lumentum.