Marvell and Lumentum officially plan to combine. Here's what to know.

By Emily Bary

A newly proposed deal would be financed in stock and target the hot optical-networking market

Marvell plans to buy Lumentum in an all-stock deal.

Marvell Technology officially plans to combine with Lumentum Holdings in a massive deal meant to target the optical-networking market.

The deal will be financed entirely through stock, with Marvell (MRVL) offering about $1,132 per Lumentum (LITE) share, or 24% above where those shares traded as of the close on Oct. 28, before rumors began swirling about a possible combination.

"AI infrastructure is undergoing a fundamental architectural shift toward optical connectivity, creating an opportunity that comes along once in a generation," Marvell CEO Matt Murphy said in a release.

Optical technologies have become key to moving artificial-intelligence data at high speeds. The companies say that, combined, they'll be able to work more quickly to address market opportunities.

See also: All the reasons Marvell investors are 'freaking out' as Lumentum deal rumors swirl

Marvell shareholders will own about two thirds of the combined business once the deal is closed. The companies expect the transaction to be complete in the first half of 2028, as it's subject to approval by shareholders and regulators.

Shares of Marvell are up about 1% in premarket trading on Monday, though they fell last week after Bloomberg News reported on a potential combination. Lumentum's stock is up more than 2%.

Marvell had a $172 billion market capitalization as of Friday's close. Lumentum was worth $76 billion after seeing its stock essentially double this year.

-Emily Bary

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11-02-26 0726ET