Splunk shares rose 23 percent in premarket trading, though they were still about $10 below Cisco’s bid price of $157 per share in cash.
Cisco Announces Historic Purchase of Splunk in Cybersecurity
In a major strategic move, Cisco Systems has reached an agreement to acquire cybersecurity specialist Splunk for a staggering $28 billion. This landmark agreement represents the largest transaction in Cisco’s history and aims to strengthen its presence in the software space, capitalizing on the growing demand for AI-based solutions.
Market Reaction to Acquisition
Meanwhile, on the stock front, Splunk shares saw a 23% increase in pre-market trading. However, they were still about $10 below Cisco’s cash price of $157 per share. At the same time, Cisco shares saw a drop of nearly 5%.
A transformative fusion
In a joint statement, the two companies said, “Combined, Cisco and Splunk will become one of the largest software companies in the world and accelerate Cisco’s business transformation toward more recurring revenue.” This statement underlines the ambition of both companies to consolidate their position in the competitive cybersecurity and enterprise software market.
Closing of the Transaction and Future Prospects
This transaction, which received unanimous approval from the boards of directors of Cisco and Splunk, is anticipated to be completed by the end of the third quarter of 2024, subject to regulatory approvals. Cisco projects that the transaction will generate positive cash flows and increase gross margin in the first fiscal year after closing. It is also expected to accelerate Cisco’s revenue growth and gross margin expansion.
Possible Termination Commission
Should the transaction be cancelled, Cisco would be required to pay a termination fee of $1.48 billion.
Who is the Cisco Company?
Cisco is a multinational technology company headquartered in San Jose, California, recognized worldwide for its leadership in the field of network and communications infrastructure. The company specializes in the design, manufacture and marketing of a wide range of products and services related to network technology, including routers, switches, cybersecurity solutions and cloud services, playing a critical role in interconnecting devices and enabling global connectivity in the digital age.For more articles like this, click here.
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