Marvell to buy Lumentum for $115 billion in stock

Marvell Technology and Lumentum, both active in AI connectivity, said Monday that Marvell will acquire Lumentum in an all-stock deal valued at $115 billion. Lumentum stockholders will receive 4.500 shares of Marvell common stock for each Lumentum share they own, according to the companies' announcement and Marvell's 8-K filing. Marvell and Lumentum said the combination would create a category leader in AI connectivity.

The Marvell board unanimously approved the merger agreement, a charter amendment to increase authorized shares and the stock issuance, and resolved to recommend that Marvell stockholders approve the share issuance and charter amendment, Marvell said in the filing. Completion requires Lumentum stockholders to adopt the merger agreement, and Marvell stockholders to approve the share issuance and charter amendment.

The deal also needs the expiration or termination of the Hart-Scott-Rodino waiting period and other required regulatory approvals, no legal restraint from certain governmental authorities, effectiveness of the Form S-4, and Nasdaq listing authorization for the new Marvell shares, the filing states. The merger agreement includes customary representations, warranties and pre-closing covenants, including ordinary course conduct, reasonable best efforts for regulatory approvals, and restrictions on alternative transaction proposals.

After closing, Marvell will appoint three directors designated by Lumentum from the Lumentum board to the Marvell board, and will nominate those still serving for election at Marvell's next annual meeting, according to the filing. Lumentum equity awards will convert into equivalent Marvell awards, with performance stock units becoming time-vesting restricted stock units; however, restricted stock units held by Lumentum non-employee directors will be cancelled and converted into the merger consideration. Lumentum Series A preferred stockholders may elect to receive Marvell Series B preferred stock instead of common stock, the filing says.

If the deal is terminated in certain circumstances, Marvell could owe Lumentum a $5.8 billion termination fee, while Lumentum could owe Marvell $2.9 billion in reciprocal situations, the 8-K states. A separate $3.2 billion regulatory termination fee applies if the merger fails for specified antitrust or foreign investment reasons and other closing conditions are satisfied, the filing says. The outside date is November 1, 2027, extendable to February 1, May 1 or August 1, 2028 under certain regulatory conditions.

Marvell and Lumentum will jointly prepare and file a Form S-4 with the SEC that includes a joint proxy statement and prospectus, the filing said. The companies cautioned that the deal is subject to risks including the ability to obtain stockholder and regulatory approvals, integrate operations, and realize expected benefits.