Marvell Technology’s $115 billion all-stock deal to buy Lumentum Holdings was announced Monday — and shareholders of both companies are making their displeasure known. Shares of both companies fell on the news, with Lumentum’s stock dropping 18.6% to close at $684.40, the worst performance in the S&P 500 on the day.
Marvell and Lumentum logos (Image Credits: MarketWatch)
Marvell Lumentum $115 Billion Merger: Why Shareholders Hate the Deal
Under the merger terms, Lumentum shareholders will receive 4.5 shares of Marvell stock for each share they own. The companies valued the deal at $115 billion based on Marvell’s October 28 closing price of $251.65 — a 23.9% premium to Lumentum’s share price at that date. But Marvell’s stock fell over the two sessions before the announcement, meaning the real-world value of the offer has already shrunk, according to MarketWatch.
One Lumentum day trader, Marek Mscichowski, called it plainly: “It’s a trash offer.” He expected a larger premium or even a cash component. Needham analyst Ryan Koontz flagged the risk that the deal could fall through entirely, while Victor Silva, a Marvell shareholder, said the short-term share dilution hurts current investors — and the deal isn’t expected to close until the first half of 2028.
What Marvell Says the Deal Is For
Marvell CEO Matt Murphy argued that Lumentum’s laser technology plus Marvell’s digital signal processors will create marketplace advantages, as AI data centers shift from copper to light-based connections. The companies project more than $1 billion in annual cost savings and a combined market opportunity of $550 billion.
The deal still needs China’s approval — described as the biggest question mark hanging over it — and carries a $3.2 billion regulatory breakup fee if it falls apart over approvals. Both companies held shareholder calls Monday to make their case. Whether investors buy it remains to be seen.
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Source: MarketWatch — read the full story there.
