Cisco to Buy Splunk for $28 Billion

Cisco will buy cybersecurity firm Splunk for about $28 billion. It is Cisco's biggest deal ever, reflecting attempts to add more recurring software revenue to its bottom line and increase the company’s AI-based data analysis capabilities.

A representative for Cisco confirmed the Splunk deal is its largest since the company was founded in 1984. The previous record was a $7 billion acquisition of set-top box maker Scientific Atlanta in 2006. Cisco stated it will pay $157 a share for Splunk, with the purchase slated to close in its fiscal Q3 next year.

Cisco CEO Chuck Robbin has spent the past several years moving the company away from solely relying on network gear revenue to a recurring software-based model. Splunk offers a security information and event management (SIEM) platform that organizations use to detect threats before they disrupt their businesses.

“Cisco and Splunk are two leaders with complementary capabilities across AI, security, and observability, and together we will help make organizations of all sizes more resilient and secure in an AI-powered world,” Robbins stated in a blog. “The deal will blend the companies’ AI and security capabilities to help make organizations more resilient and secure in an AI-powered world.”

If Cisco backs out of the deal or is forced to do so because of regulatory concerns, it will pay Splunk a termination fee of $1.48 billion, according to a regulatory filing. Splunk could pay a $1 billion breakup fee to Cisco if it backs out of the agreement. Both boards have approved the deal. Splunk CEO Gary Steele will join Cisco’s executive leadership team and report to Robbins.