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In one of the largest deals in tech history, Marvell buys Lumentum for $115B

ChipsNovember 3, 20261 min read

Marvell, a maker of custom chips, has agreed to buy Lumentum, a maker of optical chips and networking gear. The all-stock deal is worth about $115 billion including debt, which would make it one of the biggest tech deals ever.

What happened

Marvell signed a deal to acquire Lumentum. Lumentum makes optical chips, which use light to move data, and networking equipment. The deal is all stock. Marvell will give 4.5 of its shares for each Lumentum share. The enterprise value is $115 billion, which counts debt. The equity value, which is the value of the company's shares, is about $80 billion.

Key numbers

Enterprise value (including debt): $115 billion
Equity value (value of shares): about $80 billion
Exchange ratio: 4.5 Marvell shares for each Lumentum share
Microsoft's Activision Blizzard purchase in 2022: $68.7 billion
Dell's EMC purchase in 2016: $67 billion

A shared investor

Nvidia, a major chip company, is a big shareholder in both firms. In March, Nvidia agreed to buy Lumentum's advanced laser parts over several years. It also invested $2 billion to help Lumentum with research and factory expansion. Later that month, Nvidia invested another $2 billion in Marvell to grow its optical networking and chip products.

Why it matters

Marvell says that with Lumentum, it will be a leader in AI connectivity. AI data centers need fast links between chips and servers, and optical parts help move that data. The deal shows how much companies are spending to build AI systems.

What to watch

Approval from Marvell and Lumentum shareholders
Approval from government regulators
Whether the deal closes in the first half of 2028 as planned

Glossary

Marvell: A company that designs custom computer chips.
Lumentum: A company that makes optical chips and networking equipment that move data using light.
Nvidia: A large chip company that makes GPUs, the chips used for AI and graphics.
enterprise value: The total value of a company, including its debt.
all-stock deal: A purchase paid with the buyer's own shares instead of cash.

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