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Chip maker Intel Corp said it would buy security technology firm McAfee Inc for 7.68 billion in an effort to make security technology a strategic focus. Intel said it would pay 48 per share in cash for McAfee in its biggest acquisition ever. The price is a 60 per cent premium to McAfees Wednesday closing price. McAfee would become a wholly owned subsidiary of Intels software and services group.
Vijay Rakesh,an analyst at Sterne Agee,said he was surprised by the size of the premium but added that the deal showed Intels willingness to move from hardware to software and services. I think people were probably expecting some smaller acquisitions from Intel. Its definitely 8211; even by Intels standards 8211; a pretty big acquisition for them. said Rakesh.
McAfee,which was founded in 1987 and had 2 billion in revenue in 2009,has been working with Intel on a variety of projects for the last 18 months. Through that partnership,Intel decided a combination could be very powerful for bringing enhanced security to consumers, Renee James,who runs Intels software and services group,said in an interview. We have lots of activities going on in growing connected devices 8230; from connected television to mobile devices, she said. As we look at the businesses were in,we see that security is the number one purchase consideration. We believe that we can enhance security with hardware and come up with a better solution.
Intel shares fell 2.7 percent to 19.06 in premarket trade after news of the deal,while McAfee shares rose 58 percent to 47.32.
