Intel to acquire McAfee for $7.68 billion; cloud security becomes key priority

Tech giant Intel on Thursday announced that it would acquire security firm McAfee for about $7.68 billion.
Written by Andrew Nusca, Contributor

Tech giant Intelon Thursday announced that it would acquire security firm McAfeefor about $7.68 billion, placing a price on the company's common stock of about $48 per share.

Santa Clara, Calif.-based McAfee will become a fully-owned subsidiary of Intel, and become a part of Intel's Software and Services Group. The deal will close pending McAfee shareholder approval and regulatory clearance.

The acquisition underlines Intel's bet on "hardware-enhanced security" and demonstrates that that security is a necessary component as the tech company's reach expands to handle billions of new Internet-ready devices, such as mobile phones and computers, TVs, cars, medical devices and ATM machines.

Intel says it has raised the priority of security to the same level as energy-efficiency and Internet connectivity.

"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," Intel CEO Paul Otellini said in a statement. "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."

McAfee has enjoyed double-digit growth over the past year, as well as large margins, to the tune of almost 80 percent gross. It counts about 6,100 employees in its ranks and managed to rake in $2 billion in revenue in 2009.

Here's what Intel senior vice president Renée James had to say about her new group:

Hardware-enhanced security will lead to breakthroughs in effectively countering the increasingly sophisticated threats of today and tomorrow. 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. Our current work together has impressive prospects, and we look forward to introducing a product from our strategic partnership next year.

The McAfee deal comes after a series of acquisitions by Intel, ranging in scope from gaming to visual computing to embedded device and machine software.

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