Intel to buy McAfee for $7.7 billion

Intel said on Thursday that it has agreed to buy McAfee, the computer antivirus software maker, for about $7.7 billion in cash, as the chip giant seeks to expand its presence in security services.

Under the terms of the deal, Intel will pay $48 a share in cash, a 60 percent premium to McAfee's Wednesday closing stock price of $29.93.

The move signals Intel's biggest effort to date to expand beyond its core chip-making business. The purchase is Intel's biggest since its acquisition of Level One Communications for $2.2 billion in 1999.

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

The tech industry has been among the busiest for deal-makers over the past year, as the giants in the field have sought to deploy their big war chests to move into new sectors.

With its McAfee purchase, Intel is gaining an entrance into the security tech sector, one that is expected to continue growing quickly. Based in Santa Clara, Calif., McAfee reported about $2 billion in revenue last year.

Intel was advised by Goldman Sachs and the law firm Morrison & Foerster. McAfee was advised by Morgan Stanley and the law firm Wilson Sonsini Goodrich & Rosati.

(Published by The New York Times – August 19, 2010)

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