Intel to acquire McAfee for $7.68 billion

California-based globally leading chip manufacturer Intel Corporation recently announced its plan to acquire McAfee for a whopping $7.68 billion or paying $48 for every share of the company in cash. An online media report quoted Intel CEO Paul Otellini saying that the chip maker is eyeing the growing demand for computer security. McAfee is amongst the largest security technology companies and has earned revenues worth $2 billion in 2009 – amounting to 80 per cent gross margin. Although the boards of directors of both the companies have sealed the deal, it still requires the consent of the shareholders and regulatory clearances. According to industry reports, McAfee, world’s leading anti-virus software developer, was acquired at a premium rate of $7.68 billion with a per share price of $48 earning a 60 per cent bonus over $29.93 – the price of each share at closing on Wednesday last. Soon after the deal was made public, the market price of McAfee shares touched soared to $47.42. However, Intel’s share slipped to $19.11 registering a slip of 2.5 per cent. Meanwhile, Intel has also announced another acquisition – buying out Cable business of Texas instruments. According to another report, Intel Corporation is developing an operating system named Meego in close association with Nokia. This novel operating system will be used by smart phones, tablets and notebooks. This hints that Intel is taking big steps to move beyond its core business. The chip maker is also on an aggressive acquisition spree, as it has already purchase a number of software firms having specialization in visual computing, gaming, embedded device and machine software. Deliberating on the latest acquisition, Intel CEO Paul Otellini said that the buyout will enhance the company’s mobile wireless strategy enabling them to further assure concerns regarding customer and consumer security concerns. One the deal is closed; it would be possible to build security more generally into computer chips as well as other hardware, developing products that would be more defiant to attack, he said. According to Otellini when security is enabled into hardware, it would be all the more effective. At the same time, the Intel Corp. chief said that the agreement will somewhat affect the earnings of the company during the first year when both the companies are merged. Apart from expenses and additional one-time items associated with the acquisition, Intel forecasts that to some extent the deal will enhance earnings during the subsequent year and perk up thereafter.