![]() and the two companies coming together is quite synergistic - in the technology integration there is not a ton of overlap, so there is not a lot of concern about this being some sort of roll up that is going to stop competition," Robbins told Reuters. "We don’t have any history of having (antitrust) challenges in the U.S. Some analysts said the overlap in the security business could invite antitrust scrutiny, but Cisco said it was not concerned about the deal facing major regulatory hurdles. In 2012, Cisco bought TV software company NDS for $5 billion, while in 2017 it bought business software firm AppDynamics Inc for about $3.7 billion. While Cisco has pulled off sizable acquisitions in the past, its takeover of Splunk is by far the biggest in its nearly 40-year history. ![]() "This will give Cisco an edge in AI-enabled security moving forward." It's a win for both parties," said Thomas Hayes, chair of hedge fund Great Hill Capital. "Cisco bought a good synergistic business at a good price. Its acquisition will accelerate revenue growth and gross margin expansion at Cisco in the first fiscal year after the deal's close, according to the companies. San Jose, California-based Cisco already has a data-security partnership with Splunk, whose more than 15,000 customers include many prominent companies such as Coca-Cola, Intel and Porsche.Īfter a surge in revenue growth last year to nearly 40%, Splunk has grappled with an industry-wide slowdown in demand in 2023 wrought by rising interest rates and sticky inflation. Splunk's shares were trading up more than 21% at $145.04, below the offer price of $157, reflecting some uncertainty about regulatory scrutiny. The two companies have held merger talks in the past, but those discussions fell apart, Reuters has previously reported.Ĭisco offered $157 in cash for each share of Splunk, representing a 31% premium to the company's last closing price. The company operates a subscription-based pricing model for customers. Splunk is known for its strengths in the area of data observability, which helps companies monitor their systems for cybersecurity risks and other threats. Under Robbins, Cisco has over the years attempted to reduce its traditional reliance on hardware and doubled down on its bets in software and services through deals. "The thing that gives you conviction is we are bringing together two companies around security and observability, which are two of the most important areas for our customers and areas where they are unlikely to cut spending in - just because of the criticality of these threats," Cisco CEO Chuck Robbins told Reuters in an interview.
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