Intel Buys Cyber Security Giant McAfee In $7.68 Billion Cash Deal

Chip giant Intel has thrown down $7.7 billion to buy and acquire the  security software giant McAfee! According to MarketWatch, Intel will pay $48 a share in cash to buy the firm, amounting to a shade under $7.7 billion. this works out as a premium of 62% over McAfee’s closing price on Wednesday.

Intel Buys Cyber Security Giant McAfee In $7.68 Billion Cash Deal

If you’ve been wondering why Intel bought McAfee for this hefty price, the reasons could be many. Perhaps Intel feel that there’s good money in buying into a security firm, or possibly the acquisition paves the way to embed security software directly onto processors. Or maybe Intel just had the cash to burn.

According the statement issued by Intel, McAfee will continue to operate as a wholly-owned subsidiary, reporting into Intel’s Software and Services Group. Intel says the “acquisition enables a combination of security software and hardware from one company to ultimately better protect consumers, corporations and governments as billions of devices – and the server and cloud networks that manage them – go online.

However, this deal, the largest in Intel’s 42-year history, sent off shock waves on Wall Street and in Silicon Valley because of a lofty 60% premium and worries that Intel is moving far beyond its expertise in designing computer chips.

In the past, energy-efficient performance and connectivity have defined computing requirements,” Paul Otellini, Intel’s chief executive, said in a statement. “Looking forward, security will join those as a third pillar of what people demand from all computing experiences.

The tech industry has been among the busiest for deal-makers over the past year, as the giants in the field have sought to deploy their big war chests to move into new sectors.

The deal is the latest in a series of mergers and acquisitions in the sector, including Dell’s $1.3bn purchase of data storage company 3PAR earlier this week. And has SAP has paid $5.8bn for Sybase.

With its McAfee purchase, Intel is gaining an entrance into the security tech sector, one that is expected to continue growing quickly. Based in Santa Clara, Calif., McAfee reported about $2 billion in revenue last year.

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