Intel buys McAfee – Hardware meets Security Software

You won’t see this happening everyday. The Chip giant buys a security software giant, out of nowhere.

Intel, the biggest chip-hardware player, is buying software/security maker McAfee for $7.7 billion, a huge 60% premium  over yesterday’s market price.

Acquisitions like this one are Really rare in the Tech industry, here’s why:

• Intel bought a company which is almost as big as itself.
• A core Hardware company buying a core security software company.

However, Intel believes that security has become an integral part of computing, which makes it their business, too.

“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. 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,” said Paul Otellini, Intel president and CEO.

McAfee will operate as a wholly-owned subsidiary, and it will be reporting to Intel’s Software and Services Group.

The full press release is here.

Here’s the rationale for Intel:

• Acquisition enables a combination of security software and hardware from one company to ultimately better protect consumers, corporations and governments as billions of devices – and the server and cloud networks that manage them – go online.
• Intel elevates focus on security on par with energy-efficient performance and connectivity. The acquisition augments Intel’s mobile wireless strategy, helping to better assure customer and consumer security concerns as these billions of devices connect.
• Intel has made a number of software-related acquisitions of leaders in their respective industries that also rely on great silicon, including Wind River, Havok and now McAfee.

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