Cisco Acquires Cybersecurity Giant Splunk for $28 Billion

Cisco Acquires Cybersecurity Giant Splunk for $28 Billion

The deal is Cisco’s largest ever and continues a 2023 buying spree by the company focused on cybersecurity firms.

What is Splunk?

Splunk is a cybersecurity company that helps enterprises monitor and analyze their data to minimize the risk of hacks and resolve technical issues faster. Cisco makes and sells telecommunications and networking equipment, as well as a complementary suite of software.

Why did Cisco acquire Splunk?

Cisco says the acquisition will help it become a leader in cybersecurity software, and will give it access to Splunk’s expertise in data analytics and security intelligence.

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What does the acquisition mean for customers?

Cisco says that customers will benefit from a broader range of security solutions and deeper expertise in data analytics. Splunk customers can expect to continue to use the company’s products and services, and Cisco says that it is committed to supporting Splunk’s customers and partners.

What do analysts think of the deal?

Analysts had mixed responses to the deal, raising concerns about potential product overlap, regulatory scrutiny and the price Cisco paid for a company that had, from the perspective of one analyst, presented an “underwhelming” pivot to cloud.

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How will the acquisition be financed?

Cisco says it will finance the deal with a combination of cash and debt.

What are the key terms of the deal?

The deal is expected to close in the third quarter of 2024. Splunk CEO Gary Steele will join Cisco’s executive leadership team after the deal close. If Cisco backs out of the deal or is forced to do so because of regulatory intervention, it will pay Splunk a termination fee of $1.48 billion. If Splunk backs out of the deal for any reason, it will pay a $1 billion breakup fee to Cisco.

What are the implications of the deal for the cybersecurity industry?

The acquisition is a sign of the growing importance of cybersecurity software, and the increasing consolidation of the industry. It is also a sign of Cisco’s commitment to becoming a leader in cybersecurity.

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What are the risks of the deal?

The main risks of the deal are potential product overlap, regulatory scrutiny and the price Cisco paid for Splunk. Cisco and Splunk will need to carefully integrate their products and services to avoid overlap and confusion for customers. The deal will also need to be approved by regulators, which could take some time and could potentially be blocked. Finally, Cisco paid a high price for Splunk, so it will need to deliver on its promises to integrate the two companies and achieve the synergies it expects.

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Conclusion

The acquisition of Splunk by Cisco is a major event in the cybersecurity industry. The deal will give Cisco a leading position in cybersecurity software, and will give Splunk customers access to Cisco’s broad range of security solutions and expertise in data analytics. The deal is a sign of the growing importance of cybersecurity software and the increasing consolidation of the industry.