Intel to buy McAfee in $7.7-bn deal

SAN FRANCISCO - Intel, the world’s largest maker of computer chips, announced Thursday that it intended to buy software security firm McAfee in a deal worth $7.7 billion.

Analysts said the purchase signalled Intel’s intent to incorporate McAfee’s anti-virus and other security features directly into chips as the need to provide greater protection to new devices such as smartphones, cars and home appliances becomes more crucial.

Under the terms of the all-cash deal, Intel will pay $48 per McAfee share, a 60-percent premium over McAfee’s Wednesday closing stock price of $29.93.

“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,” said Intel’s chief executive, Paul S. Otellini, in a statement.

“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.”

McAfee’s president and chief executive, Dave DeWalt, said cyber attacks were a growing danger. “The cyber threat landscape has changed dramatically over the past few years with millions of new threats appearing every month.”

The deal comes as Intel moves aggressively to supplement its traditional dominance of PC and server chips by developing smaller chips for use in smartphones, which are increasingly seen as becoming the most widely used devices for accessing the internet.

While Thursday’s purchase was one of the largest in Intel’s 42-year history, the company signalled its intention to beef up its consumer software division in its purchase last year of Wind River for $884 million.

McAfee had a profit of $173 billion on $2 billion in revenue last year. Intel’s revenue was $35 billion with $4.4 billion in profit.