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Monday, Dec 4, 2023
Mugglehead Magazine
Alternative investment news based in Vancouver, B.C.

AI and Autonomy

Cisco secures US$28B deal to acquire leading cybersecurity firm Splunk

This is the largest acquisition the technology company has ever made and the sector’s largest transaction this year

Cisco inks agreement to acquire cybersecurity firm Splunk in US$28B deal
Splunk's office in San Jose, California. Photo via Wikipedia

In a major development for the technology and artificial intelligence sectors, California’s tech giant Cisco (NASDAQ: CSCO) has signed an agreement to acquire the state’s cybersecurity company Splunk (NASDAQ: SPLK) for a massive cash sum of US$28 billion.

The deal announced Thursday aims to take advantage of the rapidly developing AI field and constitutes the largest transaction in the global technology industry this year. Cisco says Splunk’s security capabilities complement its current portfolio and that the combined company will offer top-notch security analytics across different devices, clouds and applications.

Splunk’s President and CEO Gary Steele will be joining Cisco’s leadership team and says the transaction is ideal for Splunk shareholders. Those shareholders saw the stock rise by over 20 per cent following the news.

“When you bring the technology insights that we can deliver and combine them with the data platform and observability cloud that these guys have, we believe we can give customers insights that they just can’t get today,” said Cisco’s CEO Chuck Robbins in an interview with CNBC.

Cisco says the accelerating adoption of AI, increasing varieties of cybersecurity threats and multiple cloud environments have created a complex landscape requiring innovative new ways to manage and protect data. The combined company aims to use its collective knowledge to address these challenges.

Read more: IBM to provide AI training to underrepresented communities

Read more: Artificial Intelligence can support early detection of ALS

Splunk was founded in 2003 and is focused on data privacy and protection through the use of AI. It has provided system monitoring software to major companies such as The Coca-Cola Company (NYSE: KO), Honda Motor Company (TYO: 7267) and the Nasdaq stock exchange.

Cisco told analysts that the transaction would add US$4 billion to its recurring annual revenue.

The transaction, which will create one of the world’s largest software companies, is expected to close by the end of Q3 next year pending regulatory approvals. The two companies had considered merging in the past but it did not come to fruition until now.

Cisco also acquired the private cybersecurity developers Armorblox and Lightspin Technologies earlier this year. The company says it has benefitted from Armorblox’s pioneering use of large language models in cybersecurity and Lightspin’s expertise in cloud security coverage.

Cisco shares fell by 3.9 per cent to US$53.34 Thursday on the Nasdaq stock exchange but have steadily risen by almost 30 per cent over the past year.


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