Avast announced an agreement to acquire security rival AVG for $1.3 billion and $25 per outstanding share in an all cash offer earlier today.
AVG's stock jumped up more than $6 today already to $24.80 after the announcement was released by both companies.
The company reported gross income of $363.81 million and a net income of $46.97 million in 2015.
The transaction has been approved by AVG's and Avast's management board and supervisory board already, and AVG's board recommended the acceptance of the offer to AVG Shareholders.
While it is still possible that shareholders will deny the deal, it seems unlikely that this is going to happen considering the premium that Avast is willing to pay.
Both AVG and Avast control a sizeable share of the security market, and the acquisition will surely strengthen Avast's position in the market.
It is unclear at the time of writing if changes will be made to AVG's product lineup. It is for instance possible that Avast will retire some or even all of AVG's products in the coming years. It could implement core technology used by AVG into its own products before that happens.
Another possibility is that AVG will remain a brand with its own products under the Avast banner.
According to the press release, software of both companies is installed on more than 400 million devices, of which 160 million are mobile.
Combining Avast’s and AVG’s users, the organization will have a network of more than 400 million endpoints, of which 160 million are mobile, that act as de facto sensors, providing information about malware to help detect and neutralize new threats as soon as they appear. This increase in scale will enable Avast to create more technically advanced personal security and privacy products.
Avast's motiviation behind the deal is to "gain scale, technological depth and geographical breadth" to take advantage of "emerging growth opportunities in Internet Security as well as organizational efficiencies".
The deal will help Avast "serve customers with more advanced security offerings in the core business and new innovations in emerging markets, such as security for IoT devices".
It is too early to tell what the future will hold for AVG products and the new organization that emerges from the deal. At best, this could lead to improvements in detection rates, performance, and speed in which protections are integrated into company products.
It is likely that nothing will change in the next six to twelve month period after the deal is closed. After that, it is anyone's guess what will happen.
Now You: What is your take on the deal?Advertisement
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Ghacks is a technology news blog that was founded in 2005 by Martin Brinkmann. It has since then become one of the most popular tech news sites on the Internet with five authors and regular contributions from freelance writers.