Intel (NASDAQ: INTC) to Purchase McAfee for $7.7 Billion

Intel (NASDAQ: INTC) announced today that it would be acquiring McAfee for $7.7 billion in a deal which would offer McAfee shareholders a 60% premium above the company’s closing stock price on Wednesday. Shares of McAfee skyrocketed by 58.l3% during pre-market trading to $47.38 and Intel’s shares dropped by 2.2% to $19.16.

The acquisition will be the largest in Intel’s history, which is seconded by the takeover of Level One in 1999 for $2.2 billion.

“With the rapid expansion of growth across a vast array of internet-connected devices, more and more of the elements of our lives have moved online,” said Paul Otellini, Intel’s chief executive. “In the past, energy-efficient performance and connectivity have defined computing requirements. Looking forward, security will join those as a third pillar of what people demand from all computing experiences.”

Intel said that the deal would help it serve the security needs of its customers through a combination of software and hardware on mobile devices such as smartphones, televisions, medical technology and cash machines go online.McAfee will become a subsidiary of Intel under the deal and report to the company’s Software and Services Group. It had $2 billion in revenue last year and has 6,100 employees.

“We believe this acquisition will result in our ability to deliver a safer, more secure and trusted internet-enabled device experience,” Dave DeWalt, McAfee’s chief executive said in a statement.

Goldman Sachs advised Intel on the deal and McAfee was advised by Morgan Stanley.