Cisco to Acquire Splunk for $28 Billion in Major AI Cloud Security Deal
In Brief
Cisco said that the acquisition represents a significant step for both companies, aiming to combine their capabilities to drive the next generation of AI-enabled security and observability.
Cisco Systems today announced its intention to acquire Splunk in a definitive takeover agreement, valued at $28 billion. The acquisition is set at $157 per share in cash, with the transaction expected to close by the end of the third quarter of calendar year 2024.
The company said that following the acquisition, Gary Steele, President, and CEO of Splunk, will become part of Cisco’s Executive Leadership Team and report directly to Chair and CEO Chuck Robbins. However, Cisco’s stock experienced a 4.8% drop upon the announcement, while trading in Splunk shares was temporarily halted.
Cisco said that the acquisition represents a significant step for both companies, aiming to combine their capabilities to drive the next generation of AI-enabled security and observability.
“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, in a statement. “From threat detection and response to threat prediction and prevention, we will help make organizations of all sizes more secure and resilient.”
Cisco to Bolster its AI Cloud Security Portfolio
According to Cisco, the transaction is expected to have a positive impact on cash flow and gross margin in the first fiscal year after closing, with non-GAAP earnings per share (EPS) becoming accretive in the second year. Additionally, it is anticipated to enhance Cisco’s revenue growth and gross margin expansion.
Cisco and Splunk plan to move organizations from threat detection and response to threat prediction and prevention. The acquisition agreement underscores Splunk’s mission to enhance digital resilience while advancing Cisco’s strategy to securely connect all facets of the digital world.
“Uniting with Cisco represents the next phase of Splunk’s growth journey, accelerating our mission to help organizations worldwide become more resilient, while delivering immediate and compelling value to our shareholders,” said Gary Steele, president and CEO of Splunk.
“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, and we expect our community of Splunk employees will benefit from even greater opportunities as we bring together two respected and purpose-driven organizations,” Steele added.
In a blog post, Cisco underscored the pivotal role of data in business operations. The company announced that the strategic collaboration is aimed at tackling the escalating complexity stemming from generative AI, expanding threat surfaces and enhancing prevalence of multi-cloud environments.
Together, the two firms will be harnessing their collective strengths in AI, security and observability to unlock the full potential of data for organizations across various scales.
Cisco asserts that Splunk’s security capabilities specifically complement its existing portfolio, enhancing comprehensive security analytics and coverage across devices, applications, and clouds. The collaboration also aims to provide observability across hybrid and multi-cloud environments, facilitating seamless application experiences for businesses.
Furthermore, the company anticipates that this union will drive increased investments in new solutions, accelerate innovation, and support global expansion to meet diverse customer needs.
Under the agreement’s terms, Cisco will acquire Splunk at a price of $157 per share in cash, with an anticipated positive impact on cash flow and gross margin in the first fiscal year after closing.
The acquisition has garnered unanimous approval from the boards of directors of both Cisco and Splunk. However, the transaction’s completion remains subject to regulatory approval and customary conditions, including approval by Splunk shareholders. Importantly, Cisco’s share buyback and dividend programs will remain unaffected by this transaction.
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Victor is a Managing Tech Editor/Writer at Metaverse Post and covers artificial intelligence, crypto, data science, metaverse and cybersecurity within the enterprise realm. He boasts half a decade of media and AI experience working at well-known media outlets such as VentureBeat, DatatechVibe and Analytics India Magazine. Being a Media Mentor at prestigious universities including the Oxford and USC and with a Master's degree in data science and analytics, Victor is deeply committed to staying abreast of emerging trends. He offers readers the latest and most insightful narratives from the Tech and Web3 landscape.
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Victor is a Managing Tech Editor/Writer at Metaverse Post and covers artificial intelligence, crypto, data science, metaverse and cybersecurity within the enterprise realm. He boasts half a decade of media and AI experience working at well-known media outlets such as VentureBeat, DatatechVibe and Analytics India Magazine. Being a Media Mentor at prestigious universities including the Oxford and USC and with a Master's degree in data science and analytics, Victor is deeply committed to staying abreast of emerging trends. He offers readers the latest and most insightful narratives from the Tech and Web3 landscape.
