Intel buys McAfee for $7.7 billion

 

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By Nicole Kobie

Posted on 19 Aug 2010 at 13:37

Intel is to pick up McAfee for $7.68 billion, saying the deal reflects how important online security has become for computing.

The chip maker believes offering security software alongside its own hardware will help protect consumers and organisations as more devices, servers and networks connect to the web.

Intel said better security was needed as more and more devices - including mobiles as well as TVs, cars, and medical devices - were connected to the internet.

"In the past, energy-efficient performance and connectivity have defined computing requirements," said Paul Otellini, Intel's CEO and president. "Looking forward, security will join those as a third pillar of what people demand from all computing experiences."

"Everywhere we sell a microprocessor, there's the opportunity for a security software sale with it," added Otellini in a conference call.

Intel said that could come via hardware-enhanced security rather than just software, particularly with mobile devices, an area of some strength for McAfee after acquiring Trust Digital earlier this year.

Intel said such products would start arriving in early 2011. "It will add a measure of security and goodness to platforms we offer today," Otellini said.

Renee James, senior vice president of Intel's software and services group, told a press conference that McAfee would operate as a wholly-owned subsidiary, and keep all its existing products and continue to support multiple platforms.

The price is a 62% premium over McAfee's stock price yesterday. The security firm pulled in over $2 billion in revenue last year. Intel expects the acquisition to have a neutral impact on its balance sheet for the first two years, before bringing "substantial" financial and strategic benefits.

The deal is subject to the usual regulatory and shareholder approval, but James said Intel was "quite confident" the deal would close.