In Intel Corporation has entered into a definitive agreement to acquire McAfee, , through the purchase of all of the companys common stock at $48 per share in cash, for approximately $7.68 billion.
Both boards of directors have unanimously approved the deal, which is expected to close after McAfee shareholder approval, regulatory clearances and other customary conditions specified in the agreement.
The acquisition reflects that security is now a fundamental component of online computing. Todays security approach does not fully address the billions of new Internet-ready devices connecting, including mobile and wireless devices, TVs, cars, medical devices and ATM machines as well as the accompanying surge in cyber threats. Providing protection to a diverse online world requires a fundamentally new approach involving software, hardware and services.
McAfee, which has enjoyed double-digit, year-over-year growth and nearly 80 percent gross margins last year, will become a wholly-owned subsidiary of Intel, reporting into Intels Software and Services Group. The group is managed by Rene James, Intel senior vice president, and general manager of the group.
With the rapid expansion of growth across a vast array of Internet-connected devices, more and more of the elements of our lives have moved online, said Paul Otellini, Intel president and CEO.
In the past, energy-efficient performance and connectivity have defined computing requirements. Looking forward, security will join those as a third pillar of what people demand from all computing experiences," he adds.
The addition of McAfee products and technologies into the Intel computing portfolio brings us incredibly talented people with a track record of delivering security innovations, products and services that the industry and consumers trust to make connecting to the Internet safer and more secure, Otellini added.
Graham Titterington, Ovum principal analyst, software, says, "The active involvement of a company with the influence and resources of Intel in the information security arena will have a major impact on the future of computing"
"McAfee's productsextend beyond IT security into governance and aspects of systems management, and so this acquisition will increase Intel's exposure to the CxO level executives in the world's largest organisations," Titterington adds
"Many major IT vendors have been buying IT security vendors for several years, such as IBM, HP, Microsoft, and EMC. The difference is that Intel is thought of as a hardware vendor enjoying a near monopoly in its core markets (although it is also a large software supplier as well). We can assume that Intel's objective is to incorporate more security features into its chips. For users, and for businesses,this will be welcome, but clearly there is a risk of monopolistic concerns damaging the market. The situation brings echoes of what we saw in 2002 when Microsoft, in conjunction with Intel, proposed a secure computing platform under the auspices of the Trusted Computing Platform Alliance, and Microsoft's Palladium project," he further projects.
Competitive concerns largely stifled this vision which got scaled back to some encryption features that we see todayin Windows 7. Effective security has to work at the platform, network, and business levels and a secure chip cannot address all of these by itself.
Hardware-enhanced security will lead to breakthroughs in effectively countering the increasingly sophisticated threats of today and tomorrow, said James. This acquisition is consistent with our software and services strategy to deliver an outstanding computing experience in fast-growing business areas, especially around the move to wireless mobility.
McAfee is the next step in this strategy, and the right security partner for us, she added. Our current work together has impressive prospects, and we look forward to introducing a product from our strategic partnership next year.
The cyber threat landscape has changed dramatically over the past few years, with millions of new threats appearing every month, said Dave DeWalt, president and CEO of McAfee. We believe this acquisition will result in our ability to deliver a safer, more secure and trusted Internet-enabled device experience.
McAfee, based in Santa Clara and founded in 1987, is the worlds largest dedicated security technology company with approximately $2 billion in revenue in 2009.
The company has a suite of software-related security solutions, including end-point and networking products and services that are focused on helping to ensure Internet-connected devices and networks are protected from malicious content, phony requests and unsecured transactions and communications. Among others, products.
Intel has made a series of recent and successful software acquisitions to pursue a deliberate strategy focused on leading companies in their industry delivering software that takes advantage of silicon. These include gaming, visual computing, embedded device and machine software and now security.
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