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Security Demand Drives Intel / McAfee Deal

  • Reuters, Thursday, August 19, 2010 12:38 PM
Aware of consumers' increasing security demands, Intel has agreed to buy security software maker McAfee for $7.7 billion. "The pact is the latest in a steady stream of technology deals, including Dell's $1.3 billion purchase of storage company 3PAR earlier this week," Reuters reports. Marking it biggest acquisition to date, Intel has agreed pay $48 per share in cash for McAfee. The price represents a 60% premium to McAfee's Wednesday closing price -- a level company executives defended as within the range of other large software and security deals, according to Reuters.

"The McAfee deal, which caught some analysts by surprise and worried others because it marries a chipmaker and a software maker, underscores Intel's determination to continue expanding beyond the PC market to hot businesses like mobile devices and smartphones." Intel presently supplies roughly 80% of the microprocessors used in PCs. "Everywhere we sell a microprocessor there's an opportunity for a security software sale to go with it," Intel Chief Executive Paul Otellini said on a conference call. Still, "It's slightly out of left field. Nobody would have seen this coming," said Chris Hickey, an analyst at Atlantic Equities tells Reuters. "At the simplest level, Intel has strong relationships with a number of PC and server vendors. This should be an opportunity to cross-sell McAfee's security software into those PC vendors."

Read the whole story at Reuters »

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