0DAY.news (Copyright © 2023) — Cisco agrees to buy Splunk for 28 Billion dollars.

Cisco Systems has announced its agreement to acquire Splunk, a cybersecurity firm in a deal of approximately $28 billion US. This move is aimed at strengthening Cisco’s software business and taking advantage of the increasing use of AI. The news caused Splunk shares to surge by 23% during premarket trading although they still remained $10 below Cisco’s offer price of $157, per share in cash. On the other hand, Ciscos stock experienced a decline of 5%.

In a statement, both companies emphasized that the combination of Cisco and Splunk would make them one of the software companies globally and would accelerate Cisco’s shift towards generating more recurring revenue. The deal has received approval from the boards of directors at both organizations. Is expected to be finalized by the end of the third quarter in 2024 pending regulatory clearances.

Cisco highlighted that this acquisition is anticipated to have cash flow implications and contribute to margin growth within the first fiscal year after completion. Additionally, it will also drive revenue growth. Expand margin, for Cisco.

In case any unforeseen circumstances lead to cancellation Cisco will be obligated to pay a termination fee amounting to $1.48 billion.