Cisco Buys AI Firm Splunk In $28 bn Cash Deal
Cisco has agreed to buy Splunk for $28 billion, marking one of the largest acquisitions of 2023 and the AI era. The all-cash deal, which represents a 31% premium from Splunk’s $119.59 share price, aims to build the “next generation of AI-enabled security and observability,” according to Cisco CEO Chuck Robbins.
With a $225 billion market capitalization as of Wednesday’s close and $12.6 billion in net income during its most recent fiscal year, Cisco is one of the biggest and most successful tech companies in the world. The 2003-founded and 2012-public company Splunk reported a $63 million loss for the most recent quarter. Prior to the proposed sale, Splunk shares had increased by almost 40% this year, benefiting from the surge in investor interest in AI, but they were still nearly 50% below their 2020 peak. The transaction takes place during a period of unusually low M&A activity; according to PwC data, the first half of 2023 saw the lowest global deal volume for M&A since the first half of 2020.
(With inputs from Shikha Singh)
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