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Intel to Buy McAfee in $7.68 Billion Deal

Thu, 08/19/2010 - 8:11am
The Associated Press

NEW YORK (AP) — Chip maker Intel said Thursday it is buying computer-security software maker McAfee for $7.68 billion, or $48 per share.

The 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 $47.42 in premarket trading. Intel shares slipped 2.5 percent to $19.11.

Intel, which is based in Santa Clara, Calif., said the deal highlights "that security is now a fundamental component of online computing."

Intel said the deal will 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 reported its largest quarterly net income in a decade as the chipmaker benefited from a stronger computer market and more sophisticated factories.

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