Cisco (NASDAQ:CSCO) is making a significant move to enhance its cybersecurity defenses by acquiring Splunk (NASDAQ:SPLK), a cybersecurity firm, in a $28 billion deal. This strategic decision aims to address potential security threats that may arise as the use of artificial intelligence (AI) continues to expand.
The prominent Silicon Valley networking tech giant has agreed to pay $157 per share of Splunk Inc.
Cisco’s Chairman and CEO, Chuck Robbins, expressed the potential of this collaboration, stating, “Our combined capabilities will drive the next generation of AI-enabled security and observability. From threat detection and response to threat prediction and prevention, we will help make organizations of all sizes more secure and resilient.”
Dan Ives from Wedbush views this acquisition as a shrewd move for Cisco. He believes that Cisco’s focus on AI-enabled security and observability aligns well with Splunk’s highly regarded platform. According to Ives, this strategic decision positions Cisco to compete aggressively in the cybersecurity market, signaling to other major players like Palo Alto, Checkpoint, Crowdstrike, Microsoft, Zscaler, and more that Cisco is committed to gaining market share in the years to come.
The acquisition has received approval from the boards of both Cisco and Splunk. It is anticipated to be finalized by the end of the third quarter of 2024, pending approval from Splunk’s shareholders.
While Cisco Systems Inc. experienced a nearly 4% drop in its stock price during early morning trading on Thursday, Splunk’s stock saw an impressive surge of over 20%.
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Author Stephanie Bédard-Châteauneuf 