Intel
Corp. said Thursday it is buying computer-security software maker
McAfee Inc. for $7.68 billion as the chip-maker adds to its arsenal of
tools to serve an increasing array of Internet-connected devices,
including mobile phones.
The
$48-per-share price represents a 60 percent premium over McAfee's
Wednesday close of $29.93. McAfee shares surged 58 percent after the
deal was announced Thursday to hit $47.14 in morning trading. Intel
shares slipped 59 cents, or 3 percent, to $19.
Intel,
which is based in Santa Clara, Calif., said security is now a
fundamental component of online computing, but today's approach to
security isn't adequate for the growing availability of Internet
connections on mobile phones, medical devices, ATMs, automobiles and
elsewhere.
The industry needs a new approach
that combines software, hardware and services to meet tomorrow's needs,
the company said.
"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 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."
Intel is an infrequent acquirer with a history
of dabbling in, and retreating from, markets outside its core business
of building computer microprocessors. It once even had a toy division
that made microscopes and other gadgets before giving up on it because
of poor sales.
But Intel has been persistent in trying to
expand into the market for the guts of smart phones and other
Internet-connected wireless devices. And the purchase of McAfee
would help Intel secure those devices from malicious software and other
computing threats.
Intel said the
deal with hurt earnings slightly in the first year the companies are
combined. Excluding costs and other one-time items related to the
acquisition, Intel predicts the deal will slightly boost earnings next
year and improve after that.
Both boards of
directors have unanimously approved the deal. The deal still requires
McAfee shareholder approval and regulatory clearances.
McAfee, also based in Santa Clara, is one of the world's
largest security technology companies with about $2 billion in revenue
last year.
Intel has made a series of recent
software acquisitions including companies that specialize in gaming,
visual computing, embedded device and machine software.
Last month, Intel Corp. reported its largest quarterly net
income in a decade as the chipmaker benefited from a stronger computer
market and more sophisticated factories.