Lumentum extended its premarket decline to 5.5%, while Marvell Technology fell 3.3%, according to data from MSX.COM. The move came as details around the companies’ merger agreement drew attention to sizable termination fees written into the deal. Under certain circumstances, if the transaction is terminated, Marvell may be required to pay Lumentum a termination fee of as much as $5.8 billion, with a $3.2 billion fee applying in some cases. If Lumentum terminates the deal under certain specified conditions, it would need to pay Marvell a $2.9 billion termination fee. The fees are not automatic and would only be triggered if the agreement is terminated under the specific conditions set out in the merger contract. The report was published by Odaily, citing MSX.COM market data.
According to MSX.COM data cited by Odaily, Lumentum’s premarket loss widened to 5.5%, while Marvell Technology fell 3.3%.
Merger agreement includes large termination fees
The companies’ merger agreement includes sizable breakup fees. Under certain circumstances, if the transaction is terminated, Marvell would be required to pay Lumentum a termination fee of up to $5.8 billion. In some of those cases, the fee would be $3.2 billion.
If Lumentum terminates the deal under certain specified conditions, it would need to pay Marvell a $2.9 billion termination fee. Those fees would only be triggered under the specific termination conditions set out in the agreement.
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