Chipmaker Marvell Technology announced Monday it will buy optical-components maker Lumentum Holdings in a deal with an implied enterprise value of $115 billion, one of the largest technology acquisitions ever struck, according to Lumentum's own regulatory filing.

The agreement values Lumentum at roughly $1,132 per share, a premium of about 23.9% over its unaffected share price from October 28. Marvell says the deal gives it a broader connectivity and photonics portfolio addressing a combined $550 billion market, with more than $1 billion in expected annual cost synergies, and that it should boost Marvell's non-GAAP earnings per share in the first year after closing.

Marvell's stock had already dropped more than 13% in the days before the announcement, as reports of advanced talks leaked and investors worried aloud about how the company would pay for a target roughly the size of its own market capitalization. Marvell reported about $3.92 billion in cash on hand heading into the deal — far short of the price tag — and analysts at Bernstein had warned the company likely could not fund an acquisition this size with cash alone.

How It Gets Paid For

Bloomberg-sourced reporting in the run-up to the announcement indicated Marvell would lean heavily on issuing its own shares rather than cash, which would dilute existing shareholders — a key reason the stock sold off on the rumors. Analysts at RBC had argued the deal made the most sense if Marvell later sold off Lumentum's pluggable optical-module business to help offset the price.

The tie-up still needs sign-off from U.S. and Chinese antitrust regulators. Earlier coverage flagged China's review as the likely long pole in the process, given Beijing's history of slow-walking semiconductor-related mergers involving American chipmakers.

The deal lands in the middle of a volatile stretch for AI-linked tech stocks. Monday's broader market saw the Nasdaq Composite swing from a 1.4% gain to a 0.6% loss by midday, as investors rotated out of AI names and into "old economy" stocks like Sherwin-Williams and Home Depot, which helped push the Dow up roughly 328 points even as the Nasdaq slid.

Lumentum, whose optical components are used in AI data-center networking as well as telecom gear, has previously counted Nvidia among its investors. Marvell is betting that bringing photonics in-house will let it compete more directly with rivals building the optical backbone for the next generation of AI data centers.