Marvell Technology's $115-billion acquisition of Lumentum is already facing a reality check in the stock market, with the value of the all-stock offer falling sharply as shares of both companies slide.
The deal, announced on Monday, values Lumentum at $1,132 per share. However, with Marvell shares losing ground, the implied value of that offer has dropped to around $825 per Lumentum share, based on the latest share price of approximately $184.
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That represents a decline of roughly 27% from the original headline offer value, leaving the proposed payout nearly $300 lower on paper.
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The pressure is visible in both stocks. Lumentum shares fell 10.5% to around $752, while Marvell declined 6.6% to approximately $184. At current levels, Lumentum is trading roughly 9% below the implied value of the revised stock consideration.
Under the agreement, Lumentum shareholders will receive 4.5 shares of Marvell common stock for every Lumentum share they own. Unlike a cash acquisition, the consideration is not fixed in dollar terms. Its value will move with Marvell's share price until the transaction closes.
Marvell has already experienced a significant correction since reports of deal discussions emerged late last month. On October 29, its shares plunged 13.24% to $218.34, adding to investor concerns about the scale and timing of the proposed acquisition.
According to Reuters, the $115-billion transaction, including debt, represents one of the biggest acquisition bets of 2026 and is aimed at strengthening Marvell's position in the fast-growing AI data-centre market.
The deal gives Marvell access to Lumentum's portfolio of photonic products, including high-performance lasers and optical components used in AI infrastructure, cloud computing and communications networks.
Marvell CEO Matt Murphy described the shift towards optical connectivity as a generational opportunity, saying the company intended to help shape the next phase of AI connectivity.
However, the market reaction suggests investors are weighing the strategic opportunity against the financial risks of such a large acquisition.
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Axel Rudolph, chief technical analyst at IG Group, told Reuters that combining Marvell's custom-chip and networking expertise with Lumentum's optical technology could strengthen its competitive position. However, he cautioned that investors were right to question whether Marvell was paying too much and taking on too much at once.
The transaction, unanimously approved by both boards, is expected to close in the first half of calendar 2028. Until then, the dollar value of what Lumentum shareholders stand to receive will remain exposed to movements in Marvell's stock.
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