Intel in $7.68bn McAfee takeover

Source BBC News:

The world’s biggest chip maker, Intel, has agreed to buy the security technology firm, McAfee.

Intel will pay $7.68bn (£5bn) in cash.

Under the terms of the deal, Intel said it would pay $48 per share in cash for McAfee, almost 60% higher than its closing price on Wednesday.

Through buying McAfee, a leading security technology firm, Intel intends to build security features into its microprocessors which go into products such as laptops and phones.

The two companies said they had been working together for 18 months and that, should the takeover pass regulatory and shareholder approval, the first new products would be revealed early next year.

Both boards of directors have unanimously approved the deal.

However, the announcement took many analysts by surprise and sent McAfee’s shares 58% higher to $47.17, close to the proposed purchase price.

Intel shares, meanwhile, fell by 3.2% to $18.97.

Mobile growth

Tim Danton, editor of PC Pro magazine, said the announcement came out of the blue.

“Intel does buy a lot of companies and it does have a lot of more cash than anyone else out there. So it making a big acquisition isn’t a surprise, but you may have thought it more likely to buy another hardware firm,” he told the BBC.

“No doubt Intel is looking ahead and seeing that the laptop and desktop market are probably past their heyday and the big growth area is mobile.

“For a company like Intel, it’s nowhere near as strong in the mobile area as it is in the laptop and desktop areas, so it’s probably looking for new ways to get streams and revenues in the future.”

But he added: “Perhaps that is Intel’s point of view but not everybody else’s. The reaction from investors has been quite negative.”


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Srinivas Katam

Do you need help growing your business? Srinivas Katam is a Digital Marketing Strategist and Consultant with over 200 successful SEO and Social Media client engagements completed. I’ve worked with brands across the world as a digital marketing consultant to deliver revenue growth from content-focused inbound marketing campaigns. He is an Innovative Marketer who specializes in digital marketing, specifically in social media, SEO and online strategy.

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