Wilson Sonsini, Davis Polk Aid $115 Billion Marvell Lumentum Buy

Marvell Technology (MRVL) plans to acquire Lumentum (LITE) for $115B, offering 4.5 shares per Lumentum share, a 23.9% premium. The deal aims to enhance Marvell's supply chain and expand its market to $550B, with expected EPS accretion within a year and $1B in cost savings. The acquisition is set to close by mid-2028.

Marvell Technology will acquire Lumentum for $115B, aiming to lead in AI connectivity. CEOs Matt Murphy and Michael Hurlston discussed the merger on 'The Claman Countdown'.

Marvell is acquiring Lumentum for $115B to bolster its AI capabilities and optical technology offerings. The deal, expected to close in 2028, will expand the combined company's addressable market to $550B and enhance its manufacturing and R&D resources. Marvell shareholders will own 67% of the new company.

Lumentum Holdings, spun off from JDSU in 2015 with a $1B market cap, grew to $115B valuation. Marvell Tech agreed to acquire it for vertical integration in the tight laser market, crucial for AI data centers. Both stocks fell on AI bubble concerns and regulatory hurdles.

Marvell Technology will acquire Lumentum in an $115 billion all-stock deal, aiming to expand into optical components. The transaction is expected to close by mid-2028, with Marvell shareholders owning 67% of the combined entity. Both companies' shares fell following the announcement, with Marvell down 8% and Lumentum down 12.5%. The deal is driven by the growing demand for optical connections in AI data centers, positioning Marvell to compete with Broadcom.

Mizuho cut Lumentum's (LITE) price target to $1,132, maintaining an Outperform rating after strong Q3 results and Marvell's (MRVL) acquisition announcement. Lumentum reported $1.26B revenue and $4.57 EPS, beating estimates, and guided Q4 revenue to $1.6B and EPS to $6.05. Marvell will acquire LITE at $1,132 per share, a 65% premium, with $1B in expected synergies. Analysts have mixed reactions to the deal.