Lumentum Tells Customers Nothing Changes Until Its Marvell Deal Closes, Expected In 12-18 Months
A customer email says contacts, contracts and orders stay put while the $115 billion all-stock deal moves toward shareholder votes.
Lumentum is telling customers that its contacts, contracts and orders stay as they are until its combination with Marvell closes, which it expects in about 12-18 months, according to a customer email it filed Monday. The email follows the all-stock deal Marvell struck for Lumentum, valued at $115 billion.
A letter meant to calm buyers
Lumentum, which makes optical and photonic products such as laser chips, optical modules and optical circuit switches, sent the email to customers on Monday. John Bagatelos, its senior vice president of worldwide sales, wrote that Marvell and Lumentum will operate as separate companies until the transaction closes.
Customers' existing points of contact, commercial agreements, orders and support processes remain in place, he wrote, and there is no action for them to take. Product roadmaps and delivery schedules "remain on track."
The email pitches the combination as one that pairs Marvell's custom silicon, switching and connectivity with Lumentum's optical expertise, so customers can be served across the entire AI network fabric. Closing is subject to approval by shareholders of both companies and by regulators.
The terms of the Marvell deal
Marvell agreed to buy Lumentum in an all-stock transaction valued at $115 billion, with each Lumentum share converting into 4.5 Marvell shares. That implies about $1,132 per Lumentum share, a premium of about 24%. MarketWatch measured the premium against Lumentum's October 28 close, the day before the rumors began.
Marvell holders would own about 67% of the combined company and Lumentum holders about 33%, on a fully diluted basis. Both boards approved the deal unanimously, and the companies see line of sight to more than $1 billion in annual run-rate cost synergies.
Marvell CEO Matt Murphy stays chairman and CEO. Three Lumentum directors, including CEO Michael Hurlston, would join Marvell's seven-member board.
Rumors first, then the deal
Bloomberg reported on October 29, citing people familiar with the matter, that Marvell was in advanced talks for an all-stock purchase of the optics maker.
On the call, Hurlston said Lumentum had secured its second major co-packaged optics win, backed by purchase commitments exceeding $5 billion. Lumentum's market value was $76.2 billion in Monday morning trading.
Marvell intends to file a Form S-4 registration statement carrying a joint proxy statement for both companies' shareholder votes, which will contain the deal's detailed terms.
Lumentum's market value stood at $76.2 billion in Monday morning trading, against a deal valued at $115 billion.
Sources
- 425 — Lumentum Holdings Inc. re: Lumentum Holdings Inc. (LITE) — SEC EDGAR
- Marvell Reaches $115 Billion Deal for Lumentum Holdings — news.bloomberglaw.com
- Marvell Is Close to Megadeal for Laser Maker Lumentum in AI Push — news.bloomberglaw.com
- Marvell and Lumentum officially plan to combine. Here’s what to know. — MarketWatch
- Marvell Strikes $115B Deal To Acquire Lumentum: CEO Sees ‘Once In A Generation’ Opportunity In AI Optical Shift — Yahoo Finance
- Marvell Stock: Chipmaker To Buy Lumentum | Investor's Business Daily — investors.com
