Cisco Acquires Splunk in a Massive $28 Billion Deal

• Cisco has agreed to acquire the analytics and security company Splunk for a massive $28 billion.
• The share value of Cisco slid by 4% after the announcement of the acquisition, while Splunk’s stock values jumped by over 21%.

Cisco is buying analytics and security software company Splunk for $28 billion, at $157 per share. This is Cisco’s largest acquisition, accounting for over 10% of the company’s market value, to push toward AI-powered data analytics.

In recent years, Cisco has been trying to minimize its reliance on hardware sales and move towards software and services. The purchase of Splunk is a major investment in this direction and will help the network and computing company gain a wider range of customers.

Splunk is primarily known for data observability services that can used by clients to monitor cybersecurity threats, network health, and more. Cisco would likely be banking on growing investments by IT teams towards security and data management services, driven by the global interest in artificial intelligence offerings. This is especially important as Cisco has been losing its traditional backend business to the public cloud.

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Cisco’s investors did not seem very happy with the deal, however. The company’s share value fell by 4% following the acquisition announcement, indicating a sentiment that Cisco might have paid too much for the deal. On the other hand, Splunk stock values shot up by more than 21%. While both companies attempted the deal in past years, discussions continued to fall apart until last year.

This is not Cisco’s first acquisition this year, either. It has already acquired security firms, including Oort, Lightspin, Valtix, and Armorblox.

While both companies have agreed to the deal, whether the acquisition can gain regulators’ approval is yet to be seen, considering the close scrutiny many larger deals have received in recent months.

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