Cisco acquires cybersecurity firm Splunk in a $28bn deal.

Cisco, the technology conglomerate, has announced its plans to acquire Splunk, a major cybersecurity and observability company, for a staggering $28 billion. The deal will see Splunk’s President and CEO, Gary Steele, join Cisco’s Executive Leadership Team under the guidance of Chair and CEO Chuck Robbins.

The merger is expected to strengthen the digital resilience of organizations by combining Splunk’s expertise in enhancing digital security with Cisco’s commitment to secure connections. The aim is to create a synergy between the two companies in order to fortify organizations against potential threats.

Chuck Robbins, CEO of Cisco, has expressed his enthusiasm for the merger, highlighting the potential to revolutionize AI-enabled security and observability. He envisions transitioning from mere threat detection to proactive threat prediction and prevention, thus reinforcing security for organizations of all sizes.

Gary Steele shares Robbins’ sentiment and sees the merger as a significant leap in Splunk’s growth trajectory. By combining their strengths, the two companies aim to set industry benchmarks in security and observability, leveraging data and AI to deliver superior customer outcomes.

The merger addresses the growing complexity of managing vast amounts of data in today’s hyperconnected environment. Splunk’s security expertise will enhance Cisco’s existing portfolio, enabling unparalleled security analytics from devices to cloud applications. The combined strength of the two companies promises unmatched observability across hybrid and multi-cloud platforms, ensuring seamless application experiences.

The acquisition will also drive investments in innovative solutions, accelerating innovation and expanding their global reach to serve a broad customer base. Both companies are known for their purpose-driven ethos, cultural values, and exceptional talent, and their union is expected to foster an environment of innovation and inclusion, attracting top software talent.

In terms of financial impact, the $28 billion deal is projected to enhance Cisco’s revenue growth and gross margin. It is anticipated to be cash flow positive in its first fiscal year. The acquisition is expected to be completed by the third quarter of 2024, subject to approval from Splunk shareholders and regulatory bodies.

Cisco has reassured stakeholders that the deal will not affect its existing share buyback or dividend programs. More details about the agreement can be found in Cisco’s forthcoming Form 8-K report related to the transaction.

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