Cisco Acquires Cybersecurity Firm Splunk For $28 Billion

Cisco is acquiring the cybersecurity firm Splunk in a $28 billion deal, strengthening its defenses against potential security threats that may be amplified by the increasing use of artificial intelligence (AI), Michelle Chapman reported for the Associated Press (AP).

"Our combined capabilities will drive the next generation of AI-enabled security and observability," said Cisco Chairman and CEO Chuck Robbins in a prepared statement. I Photo: Cisco

The Silicon Valley networking technology giant will pay $157 per Splunk Inc. share.

"Our combined capabilities will drive the next generation of AI-enabled security and observability," said Cisco Chairman and CEO Chuck Robbins 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."

Dan Ives of Wedbush views the transaction as a strategic move for Cisco.

"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 signal to Palo Alto, Checkpoint, Crowdstrike, Microsoft, Zscaler, and others that the tech giant is not sitting idle in this market and is now making an aggressive play to gain market share in the coming years."

The boards of both companies have approved the acquisition, which is expected to close by the end of the third quarter of 2024. It still requires approval from Splunk shareholders. Cisco Systems Inc. shares fell nearly 4% in early morning trading on Thursday, while Splunk's stock surged more than 20%.

WEEKLY FEATURE : Jose Mari Chan And The Christmas Anthem