Cisco to acquire Splunk for $28bn to drive 'AI-enabled security and observability'

‘From threat detection and response to threat prediction and prevention, we will help make organisations of all sizes more secure and resilient,’ Cisco CEO Chuck Robbins says.

Networking giant Cisco said it has reached an agreement to acquire unified security and observability platform developer Splunk for roughly $28bn to "drive the next generation of AI-enabled security and observability."

The two companies announced the blockbuster acquisition agreement Thursday, with San Jose, California-based Cisco planning to pay $157 per share in cash to buy San Francisco-based Splunk. This represents a nearly 31.3 per cent premium over Splunk's closing stock price on Wednesday.

The deal is expected to close in the third quarter of 2024, pending regulatory approval and other customary closing conditions including acceptance by Splunk's board.

Cisco's stock price was down more than 3.5 per cent before trading opened Thursday. Splunk's shares grew more than 23 per cent in pre-market trading.

The deal's announcement comes roughly a year and a half after Cisco reportedly put down a takeover offer for Splunk worth more than $20bn.

"From threat detection and response to threat prediction and prevention, we will help make organisations of all sizes more secure and resilient," said Cisco CEO Chuck Robbins in a statement.

Splunk CEO to stay with Cisco

Gary Steele, president and CEO of Splunk, said in his own statement that the combined companies 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."

"We're thrilled to join forces with a long-time and trusted partner that shares our passion for innovation and world-class customer experience, and we expect our community of Splunk employees will benefit from even greater opportunities as we bring together two respected and purpose-driven organisations," he added.

Steele will stay on board as part of Cisco's executive leadership team and will report to Robbins, according to the statement.