Marvell Technology 8-K

Summary

Proposed all-stock merger of Marvell and Lumentum. Marvell’s board unanimously approved the agreement and recommended that Marvell stockholders approve the share issuance and an increase in authorized common shares; completion also requires Lumentum stockholder approval and regulatory clearances.

Key Figures

• Lumentum common stockholders would receive 4.5 shares of Marvell common stock for each Lumentum common share. Lumentum Series A preferred holders may elect one share of Marvell Series B preferred stock per share, intended to retain the Series A’s terms and rights and convert into the common-stock merger consideration.
• Each Lumentum option, restricted stock unit and performance stock unit would convert into a corresponding Marvell award, with performance stock units becoming time-vesting restricted stock units. Lumentum non-employee directors’ restricted stock units would instead be cancelled for the common-stock merger consideration.
• Termination fees: Marvell would owe Lumentum $5.8B in specified circumstances, including a board recommendation withdrawal or Marvell’s termination to pursue a superior proposal; Lumentum would owe Marvell $2.9B in corresponding circumstances. Each fee can also apply in certain cases involving a later alternative transaction within 12 months after termination.
• Marvell would owe a separate $3.2B regulatory termination fee if the deal ends in specified regulatory-related circumstances after other closing conditions are satisfied or capable of being satisfied.
• Closing requires, among other conditions, approval by Lumentum stockholders and Marvell stockholders, required regulatory approvals, an effective registration statement and Nasdaq listing authorization for the Marvell shares. The agreement’s outside date is 11/01/2027, extendable to 02/01/2028, 05/01/2028 or 08/01/2028 in specified cases involving regulatory approvals.
• After closing, Marvell would appoint three Lumentum board designees, reasonably acceptable to Marvell, to its board and nominate any still serving for election at Marvell’s first subsequent annual meeting.

Investor Takeaways

• Watch the two companies’ stockholder votes and required regulatory approvals; failure to obtain them could prevent the merger from closing.
• The effective registration statement and satisfaction of the remaining closing conditions will determine whether the transaction closes by the outside date or qualifies for a regulatory-related extension.