Cisco acquired cybersecurity firm Splunk for $28 billion to bolster its defenses against potential security threats heightened by the increased usage of Artificial Intelligence (AI).
The networking tech, Silicon Valley will pay $157 per Splunk Inc. share.
“Our combined capabilities will drive the next generation of AI-enabled security and observability,” Chuck Robbins, Cisco Chair and CEO said in a prepared statement. “From threat detection and response to threat prediction and prevention, we will help make organizations of all sizes more secure and resilient.”
“Cisco is focused on the next generation of AI-enabled security and observability and Splunk’s well regarded unique platform makes this the right move at the right time for Cisco in our view and an aggressive strategic play in cybersecurity,” he wrote in a note to clients. “For Cisco this is a shot across the bow at Palo Alto, Checkpoint, Crowdstrike, Microsoft, Zscaler and others that the tech stalwart is not sitting idle in this market and now is making an aggressive play to gain market share in the coming years.”
Both firms’ boards of directors accepted the transaction, which is expected to finalise by the end of the third quarter of 2024. It still needs to be approved by Splunk shareholders.
Cisco Systems Inc. shares were down over 4% in early morning trading on Thursday, while Splunk’s price was up more than 20%.
