On Thursday Cisco agreed to buy Splunk in a $28 billion deal intended to address AI-enabled security and observability issues.
Cisco announced yesterday its intention to acquire Splunk, a renowned name in data observability and security, in a deal valued at approximately $28 billion. Cisco intends to pay $157 in cash for each share of Splunk.
This acquisition, which is Cisco’s biggest deal ever, is aimed at furthering the company’s move to develop the next generation of AI-enabled security and observability solutions that aren’t capable of only threat detection and response but also threat prediction and prevention.
Also, Splunk’s technology helps businesses monitor and analyze their systems for cybersecurity risks and other threats. Cisco has focused mainly on manufacturing computer networking equipment, which is a line of business that has recently come under an increasing rate of supply chain attacks. With this acquisition, Cisco hopes to cut down its decades-long reliance on networking equipment manufacturing and solidify its cybersecurity and AI commitments to meet client demand and fuel growth.
When will the Cisco/Splunk deal close?
This deal is set to close by the end of the third quarter of 2024. Although a unanimous agreement has been reached by the boards of directors at both Cisco and Splunk, the deal is still subject to regulatory approval and the consent of Splunk shareholders. Assuming the deal is finalized, Splunk CEO and President Gary Steele will join Cisco’s executive leadership.
Why this acquisition is a good move for Cisco and Splunk
New revenue streams and security innovations
Cisco asserts that the merger will accelerate its revenue growth without impacting its previously announced share buyback program or dividend program. In addition, this acquisition is fueled by the changing landscape in which Cisco operates.
The rising influence of the public cloud has significantly impacted Cisco’s traditional…