Lumentum Hints It’s A Takeover Target Despite Its Own Acquisition Spree
Intriguing merger agreement clause suggests prospective acquirer may be acquired.
February 2, 2021
Lumentum (LITE), an optical and photonics manufacturer best known for supplying Apple with components for its 3D sensing cameras, has made relatively large acquisitions in each of the past two years. Its latest— Coherent, Inc. (COHR)— expands Lumentum’s product portfolio outside of communications and 3D sensing.

In its latest 10-Q, Lumentum warns investors it may owe Coherent a $337 million break up fee should the deal be terminated or not close on time. Included in the details of the merger agreement is an intriguing clause that suggests Lumentum may itself be a takeout target:

“...upon termination of the Merger Agreement under specified circumstances (including termination by Lumentum to accept a superior proposal for the acquisition of Lumentum)...”

In prior filings, Lumentum has cited Broadcom (AVGO) as a competitor. Broadcom is a serial acquirer that did not make an acquisition in 2020.
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