Cisco to acquire cybersecurity firm Splunk for $28 billion in AI strategy boost
Cisco's $28 billion Splunk acquisition aimed at advancing AI-enabled security
Splunk Inc., a well-regarded cybersecurity firm, is being acquired by the Silicon Valley network technology giant, Cisco, in a transaction valued at US$28 billion. This strategic move is part of Cisco’s plan to enhance its security measures against potential threats, particularly those amplified by the growing implementation of artificial intelligence. The purchase price is set at US$157 per share of Splunk Inc.
Chuck Robbins, Chair and CEO of Cisco, expressed his optimism about the acquisition. He highlighted that the fusion of their capabilities would pave the way for the advancement of AI-enabled security and observability, ranging from threat detection and response to threat prediction and prevention. Robbins further stated that their combined efforts would bolster the security and resilience of organisations of all sizes.
This acquisition is viewed as a strategic step by Cisco, as stated by Dan Ives of Wedbush. He wrote to clients about Cisco’s focus on the next generation of AI-enabled security and observability. Ives believes that Splunk’s unique platform makes this the right move at the right time. He also noted that this acquisition is a clear message to Palo Alto, Checkpoint, Crowdstrike, Microsoft, Zscaler and others that Cisco is determined to gain market share in the coming years and is not sitting idle in this market.
The proposed acquisition has been approved by the boards of both companies and is projected to be finalised by the end of the third quarter in 2024. However, it is still subject to approval from Splunk shareholders.
Following the announcement of the acquisition, shares of Cisco Systems Inc. dropped nearly 4% during early morning trading on Thursday. Meanwhile, Splunk’s stock experienced a significant surge, increasing by more than 20%.
