Intel's McAfee Acquisition Closes, With Joint Products Expected In 2011


Intel's $7.78 billion blockbuster acquisition of security stalwart McAfee officially closed on Monday, the two companies said in a statement. The deal creates a new superpower combining Intel's chip-making prowess and McAfee's legacy of security gear.

As part of the acquisition, McAfee will continue to develop and sell security products and services under its own brand as a wholly owned subsidiary of Intel. Intel CEO Paul Otellini has said that Intel intends to preserve McAfee's existing business model, sales practices, terms and conditions, products and branding.

Intel said Monday that the first products that leverage the duo's partnership will hit the market later this year "with the intent of tackling security and the pervasive nature of computing threats in an entirely new way," the companies said.

As a wholly-owned subsidiary of Intel, McAfee reports into Intel's Software and Services Group. The group is managed by Ren�e James, Intel senior vice president and general manager. McAfee president Dave DeWalt will report to James.

Both companies had said publicly that the acquisition would close in the first quarter.

According to Intel and McAfee, security, as it's done today, doesn't adequately address the millions of new Internet-ready devices, including PCs, mobile and wireless devices, TVs, cars, medical devices and ATMs. Coupled with a surge in cyber threats, the companies said a new approach is needed that involves three distinct layers: software, hardware and services.

The Intel-McAfee acquisition closing comes on the heels of McAfee teaming up with another Intel-owned subsidiary, Wind River, to better secure mobile and embedded devices. The McAfee and Wind River partnership was announced at RSA Conference 2011 and is a joint technology and go-to-market play from Santa Clara, Calif.-based McAfee and Alameda, Calif.-based Wind River.

Wind River develops operating systems, middleware and software design tools for embedded computing systems. Wind River's main products include VxWorks, a proprietary real-time operating system, and Linux software for embedded applications. It also provides a range of product design services and development and testing tools.

Under the terms of the partnership, McAfee and Wind River will develop, market and support security solutions specifically to manage and protect non-PC embedded devices.

"In the past, energy-efficient performance and Internet connectivity have defined computing requirements," James in a statement. "Intel has added security as a third pillar of what people demand from their experiences with personal computers and other connected devices. Security challenges put the future potential of computing at risk. The acquisition of McAfee adds not only world-leading security products and technologies to Intel's computing portfolio, but also brings incredibly talented people focused on delivering products and services that help make connecting to the mobile Internet safer and more secure."

The pending acquisition by Intel has helped push McAfee to record revenues. The company recently reported fourth quarter revenue that $549.6 million, a 5 percent increase over the same quarter the previous year. For full-year 2010, McAfee reported revenue of nearly $2.1 billion, a jump of 7 percent over 2009.

The acquisition closing was the last step for the major merger, which was announced in August 2010.

Last month, the Intel-McAfee acquisition received approval from the European Commission, and in late 2010, the Intel-McAfee deal already received approval by the U.S. Federal Trade Commission.