Companies
Lumentum tumbles as Marvell agrees to an all-stock takeover
Marvell agreed to buy Lumentum in an all-stock deal it valued at about $115 billion. Lumentum tumbled 18.6%, and Marvell's own drop shrank what the offer is worth.
Quick Read
- Marvell agreed to buy Lumentum for stock in a deal it valued at about $115 billion, paying 4.5 Marvell shares per Lumentum share.
- Lumentum tumbled 18.6% and Marvell fell 12.7% on Monday.
- Because the payout is in Marvell stock, Marvell's price sets what Lumentum holders could receive.
- The deal needs shareholder and regulatory approvals, and the companies expect it to close by the middle of 2028.
What did Marvell agree to buy?
Marvell Technology (Nasdaq: MRVL) said Monday it agreed to acquire Lumentum Holdings (Nasdaq: LITE) in an all-stock deal it valued at about $115 billion. Lumentum holders would get 4.5 Marvell shares for each Lumentum share they own.
Why it matters: Lumentum makes high-performance lasers, optical circuit switches, and optical transceivers, which send data as light. Marvell sells chips, networking gear, and custom-designed chips. The companies said AI data centers are moving their connections from copper wires toward faster, more energy-efficient optics.
Marvell CEO Matt Murphy would stay chairman and chief executive of the combined company. Lumentum CEO Michael Hurlston would join Marvell's board.
Why did Marvell and Lumentum shares fall?
Lumentum tumbled 18.6% on Monday to $684.40, and its market value lost $14 billion. Marvell fell 12.7% to $171.41, and its market value lost $22 billion.
In an all-stock deal, the seller's holders get a fixed number of the buyer's shares, not a fixed dollar amount. When Marvell's price falls, each Lumentum share is worth less under the terms.
The selling hit a wider slice of tech. The technology sector fund slid 2.9%, and the Nasdaq-100 fell 1.4% the same day. Marvell now trades 45.8% below its 52-week high of $316.43.
What does Marvell say it gets, and what comes next?
What’s next: Marvell said it expects more than $1 billion in yearly cost savings when the companies are combined. It also said the deal could lift its adjusted earnings per share, or profit per share, after closing. The companies said the combination widens the market they can sell into.
Each company's board approved the deal. It still needs shareholder and regulatory approvals, and the companies expect it to close by the middle of 2028.
The open question is where Marvell's stock trades between now and closing, since that price sets what Lumentum holders would actually receive.
For readers
What it could mean for you: If you own Lumentum shares directly, your payout is tied to Marvell's stock price, not a set dollar amount. Every move in Marvell from now until closing could change what your shares are worth under the deal. If you own Marvell directly, the deal would issue new shares to Lumentum holders, so your slice of the combined company would get smaller. The deal's value to you may hinge on whether the promised cost savings show up. Either way, the outcome could depend on approvals the companies expect by the middle of 2028.
Questions and answers
How much is Marvell paying for Lumentum?
Marvell valued the all-stock deal at about $115 billion. Lumentum holders would receive 4.5 Marvell shares for each Lumentum share, so the deal's value moves with Marvell's stock.
Why did Lumentum stock fall after the Marvell deal?
Lumentum tumbled 18.6% on Monday, and Marvell fell 12.7%. Because the payout is in Marvell shares, a lower Marvell price means a smaller payout for Lumentum holders.
When will the Marvell and Lumentum deal close?
The companies expect it to close by the middle of 2028. Closing depends on shareholder and regulatory approvals.
The numbers
| Marvell Technology (MRVL) price | $171.41 |
|---|---|
| Marvell Technology (MRVL) change | −12.72% |
| Marvell Technology (MRVL) market value | $150 billion |
| Marvell Technology (MRVL) 52-week high | $316.43 |
| Lumentum (LITE) price | $684.40 |
| Lumentum (LITE) change | −18.59% |
| Lumentum (LITE) market value | $62 billion |
| Lumentum (LITE) 52-week high | $1,133.40 |
| S&P 500 change | −0.51% |
| 10-year Treasury yield | 4.91% |
Monday’s close
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