Intel Makes Security Play With McAfee Acquisition

Intel is looking to expand beyond its semiconductor empire after making an offer to buy security vendor McAfee for nearly £5 billion

Chip giant Intel has announced an offer to acquire security vendor McAfee in a deal worth approximately $7.68 billion (£4.9 billion).

Intel said it will purchase all of McAfee’s common stock for $48 (£30.65) per share in cash. More importantly, both boards of directors have unanimously approved the deal, which is expected to close after McAfee shareholder approval, regulatory clearances and other customary conditions specified in the agreement.

Intel intends to allow McAfee to operate as a wholly-owned subsidiary, reporting into Intel’s Software and Services Group.

Strategic Move

The move is highly significant, especially given the fact that Intel hardware is used in most computers around the world. This gives McAfee entry to a huge potential market, and likewise it means that many organisations will be able to source their security software and hardware from just one company.

This means that the acquisition is sure to be faced with vigorous antitrust objections from rival security vendors and intense scrutiny from industry regulators.

Paul Otellini

“Everywhere we sell a processor there is an opportunity to sell security,” said Paul Otellini, Intel president and CEO on a conference call. Otellini also stressed the importance of anti virus protection nowadays, describing it as increasingly necessary software.

Prior to this, Intel had been focusing on energy-efficiencies, management options, and connectivity, and this acquisition means that security is now firm in the chip giant’s sights, especially important as most computers are used online.

Security Focus

“Today’s security approach does not fully address the billions of new Internet-ready devices connecting, including mobile and wireless devices, TVs, cars, medical devices and ATM machines as well as the accompanying surge in cyber threats,” said Intel in a press release. “Providing protection to a diverse online world requires a fundamentally new approach involving software, hardware and services.”

“Inside Intel, the company has elevated the priority of security to be on par with its strategic focus areas in energy-efficient performance and Internet connectivity,” it added.