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US company NortonLifeLock has agreed to buy its European counterpart Avast in a consumer cyber security deal that values the London-listed group at more than $8bn.
In a statement on Tuesday, the two companies said that Avast shareholders would receive a combination of cash and newly issued shares in NortonLifeLock, with multiple options available to them for the proportion of cash and stock they will receive.
Based on Norton’s share price ahead of the offer period, the tie-up valued Avast between $8.1bn and $8.6bn, it said.
Founded in the 1980s, Prague-based Avast became one of a handful of dominant players in the niche consumer cyber protection market, going public in 2018 in one of the UK’s biggest tech listings at the time.
The deal will allow Norton, its larger Nasdaq-listed rival, to tap its 435m global users at a time of heightened concerns over threats from increasingly sophisticated cyber criminals such as ransomware gangs.
The combined business will be listed on Nasdaq but be dual headquartered in Prague and Tempe, Arizona. It would have 500m customers, with the deal expected to deliver approximately $280m of annual cost savings by the third full year after its completion, the companies said.
Vincent Pilette, Norton chief executive, will remain in his role while Ondrej Vlcek, Avast’s chief executive, will join Norton as president and board member.
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Vlcek said cyber criminals were increasingly taking advantage of the pandemic as people shifted to working from home on less secure networks, and using technology such as artificial intelligence to target victims at scale.
“At a time when global cyber threats are growing, yet cyber safety penetration remains very low, together with NortonLifeLock, we will be able to accelerate our shared vision of providing holistic cyber protection for consumers around the globe,” he said.
Where the consumer market used to largely comprise antivirus software, it now also includes identity protection and privacy management, with McAfee and Microsoft among the other dominant players.
Pilette said that Norton had historically focused on identity protection, but would be able to bring in Avast’s privacy expertise “to provide a more comprehensive portfolio to our current customers”.
Norton had recently attracted takeover interest from groups including McAfee and private equity firms TPG and Thoma Bravo, after having sold its enterprise business to Broadcom in late 2019.
Both Avast and Norton shares slipped about 1 per cent in after-hours trading.
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