Marvell's $115 billion Lumentum deal spooks investors
The move
Marvell Technology agreed on Nov. 2 to buy optical-component maker Lumentum Holdings in an all-stock deal with an implied enterprise value of $115 billion, the companies said in a joint press release. Lumentum holders will get a fixed 4.5 Marvell shares each, a 23.9% premium to the Oct. 28 unaffected price; Marvell holders will own about 67% of the combined company and Lumentum holders about 33%, with closing expected in the first half of 2028. Koch, Inc., the holding company run by Charles Koch, has reported owning Marvell shares in its 13F filings.
Why it matters
Marvell's release cites a $550 billion addressable market and more than $1 billion in annual cost synergies, but Bank of America cut Marvell to Neutral from Buy and its price target to $225 from $400, citing possible selling pressure from the roughly 50% increase in Marvell's share count, financial news site goldesel.de reported.
The bear case
Marvell says the deal should add to its non-GAAP earnings per share in the first year after closing, but the transaction still needs shareholder and regulatory approval, and BofA flagged that a long review could extend the stock overhang.
What to watch
Shareholder and regulatory approval for the deal, expected to close in the first half of 2028.