Cisco is adding a mega deal to its growing list of acquisitions, with security major Splunk joining in. The communications behemoth announced it is acquiring cybersecurity major Splunk in a $28B deal. Upon close of the acquisition, Splunk President and CEO Gary Steele will join Cisco’s Executive Leadership Team reporting to Chair and CEO Chuck Robbins. The deal values Splunk at $157 a share.
With two of the biggest tech companies coming together, Cisco is aiming to become an undisputed leader in the security and threat intelligence sector. “We’re excited to bring Cisco and Splunk together. Our combined capabilities will drive the next generation of AI-enabled security and observability,” said Chuck Robbins, chair and CEO of Cisco. “From threat detection and response to threat prediction and prevention, we will help make organizations of all sizes more secure and resilient.”
Interestingly, Cisco seems to be paying quite a premium for this deal. Splunk’s existing market cap is in the $20 billion range, with share price dangling between the $80 and $90 a piece range. It could hint that there were more bidders for the company, with Cisco emerging as a winner, and making it rain for Splunk shareholders.
With the ever-increasing use of data, and now generative AI building over that data, companies need even more secured layers to deal with possible breaches. Factoring in the acceleration and adoption of generative AI, expanding threat surfaces, and multiple cloud environments, it creates a level of complexity that is unlike anything organizations have faced. Cisco and Splunk are looking to bank on that increasing business market.
“Together, we will form a global security and observability leader that harnesses the power of data and AI to deliver excellent customer outcomes and transform the industry. We’re thrilled to join forces with a long-time and trusted partner that shares our passion for innovation and world-class customer experience”, added Gary Steele, president and CEO of Splunk.
The union of these two organizations will allow for greater investments in new solutions, accelerated innovation, and increased global scale to support the needs of customers of all sizes, added an official release from Cisco.
The acquisition has been unanimously approved by the boards of directors of both Cisco and Splunk. It is expected to close by the end of the third quarter of calendar year 2024, subject to regulatory approval and other customary closing conditions including approval by Splunk shareholders. The latter could turn out to be pretty difficult, considering how there has been increasing scrutiny globally, for such mega deals involving two market leaders joining forces to virtually wipe-out any competition.