Software security built right in the computer chip hardware. That could be the next trend in the fight against attackers on the Internet. Shares of other computer security houses like Symantec are also gaining in the anticipation that other big technology companies could make a similar move for those companies.
Intel buys McAfee for US$7.68 billion.
In the largest technology deal this year so far, Intel will fork out US$7.68 billion for antivirus and computer security software maker McAfee. Intel has said that the acquisition could allow it to build McAfee’s anit-virus technology directly into its chips, helping to protect computers, wireless devices and embedded systems in vehicles and ATMs from online crime.
As a sign of how keen Intel is over McAfee, it is paying a higher-than-average premium for McAfee. The US$48 for each McAfee share is a 60% premium over McAfee’s US$29.93 close on Wednesday. Data from Bloomberg show that in the last five years there have been 171 acquisitions in the Internet security business, with an average premium of only 22.3 percent.
To address worries that Intel will mismanage their new acquisition into oblivion, Intel said that McAfee would “operate as a wholly owned subsidiary”. There will be no job cuts from the 61,000 employees in McAfee which, like Intel, is also based in Santa Clara, California.
Intel’s foray into computer security will hopefully help it expand beyond the PC market, which is increasingly overshadowed by growths in the smartphone and tablet markets. Although Intel’s chips run more than 80 percent of personal computers, they are absent from mobile phones now on the market.