Marvell agrees to buy Lumentum in an all-share deal
Marvell and Lumentum agreed an acquisition payable entirely in shares, with an implied enterprise value of 115 billion dollars for Lumentum. The proposed combination brings together chip and optical connectivity businesses. The companies target completion in the first half of 2028, subject to shareholder and regulatory approvals, and expect annual cost savings exceeding 1 billion dollars.
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Shares instead of cash
Marvell Technology, a semiconductor company, agreed to acquire optical connectivity supplier Lumentum on 2 November.[1], [2]
The binding agreement, provides for payment entirely in Marvell shares. Each Lumentum share would receive 4.5 Marvell shares under a fixed exchange ratio. The announced enterprise value for Lumentum is 115 billion dollars, based on closing prices on 28 October, which the companies identify as the last trading day before transaction speculation began.[1]
Ownership and leadership
On a fully diluted basis, existing Marvell shareholders are expected to hold approximately 67 per cent of the combined company and Lumentum shareholders approximately 33 per cent. Both boards unanimously approved the agreement. Matt Murphy is intended to remain chairman and chief executive. Three Lumentum directors, including chief executive Michael Hurlston, would join Marvell’s board, which currently has seven members. The leadership changes are part of the proposed combination.[1]
Optical connections and approvals
The deal would bring Marvell’s networking, electrical and optical connection and custom-chip operations together with Lumentum’s lasers and optical connection businesses. Management targets annual cost savings exceeding 1 billion dollars and expects an addition to adjusted earnings per share in the first year after completion. The companies aim to close in the first half of 2028, subject to shareholder approvals, regulatory clearances and other customary conditions.[1]
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