Cisco announced on Thursday its intention to acquire cybersecurity and observability software provider Splunk for $28 billion. It is Cisco’s largest acquisition ever and a declaration of intent by the company to push further into cybersecurity.
In the press release of the acquisition, Cisco CEO Chuck Robbins said the Cisco Security Cloud and Splunk’s data platform are complementary to one another, enabling customers that use both services to move from threat detection to threat prediction and prevention.
“The Cisco Security Cloud has visibility into vast amounts of security data — network data, identities, emails, web traffic, endpoints, and processes,” said Robbins. “With Splunk, Cisco is adding one of the world’s best data platforms to Cisco’s robust security portfolio.”
Robbins also mentioned the growth of generative AI as another challenge, which Cisco and Splunk will be able to tackle more effectively with both services combined.
“Uniting with Cisco represents the next phase of Splunk’s growth journey, accelerating our mission to help organizations worldwide become more resilient,” said Gary Steele, president and CEO of Splunk. “Together, we will form a global security and observability leader that harnesses the power of data and AI to deliver excellent customer outcomes and transform the industry.”
At $157 a share, Cisco’s offer was a 31 percent premium on Splunk’s share price on Wednesday. The company’s stock increased rapidly following the news, and stood at $144 per share at close on Thursday.
It is the second largest technology acquisition of 2023, behind Broadcom’s acquisition of VMWare for $69 billion.
The two companies expect to complete the acquisition by the third quarter of 2024, with Steele joining Cisco’s executive team. It is not clear if all Splunk jobs will be transferred over to Cisco, or if there will be layoffs. Splunk is not a profitable business and reported a net loss of $278 million in 2022.