In a sudden development, the boards of Cisco and Splunk have given their approval for the acquisition to boost cybersecurity. The deal is anticipated to be finalized by the conclusion of the third quarter of 2024.
In a significant move to bolster its defenses against the increasing potential security threats arising from the widespread use of artificial intelligence, Cisco is set to acquire Splunk, a cybersecurity firm, in a deal valued at $28 billion. Cisco, a prominent networking technology giant headquartered in Silicon Valley, will be purchasing Splunk Inc. shares at a rate of $157 per share to boost cybersecurity.
Chuck Robbins, the Chairman and CEO of Cisco, expressed in a prepared statement, “Our combined capabilities will pave the way for the next generation of AI-enabled security and observability. From threat detection and response to predicting and preventing threats, we are committed to enhancing the security and resilience of organizations, regardless of their size.”
According to Dan Ives of Wedbush, this acquisition is a strategically sound move for Cisco. He noted, “Cisco’s focus on the next generation of AI-enabled security and observability, combined with Splunk’s highly-regarded unique platform, positions this acquisition as the right move at the right time for Cisco. It represents an assertive strategic move in the cybersecurity sector. For Cisco, this signals a strong commitment to gain market share in the years ahead, putting it in direct competition with companies such as Palo Alto, Checkpoint, Crowdstrike, Microsoft, Zscaler, and others.”
While the boards of both companies have given their green light for the acquisition, its finalization is contingent upon approval from Splunk shareholders. In the wake of this announcement, Cisco Systems Inc. witnessed a nearly 4% decline in its stock during early morning trading on Thursday, while Splunk’s stock surged by over 20%.
