EU Concerns Delay Intel-McAfee Deal

By Ed Silverstein December 21, 2010

Intel’s purchase of McAfee, a computer security products company, has gotten delayed by European regulators who are concerned about anti-trust issues, according to news reports.

European officials are considering whether to scrutinize the $7.68 billion acquisition of McAfee, Inc., the Wall Street Journal reported.

The newspaper explains that European officials may be concerned about Intel, the world’s largest chipmaker, wanting to embed security products on micro processing chips, and the ensuing effect on competition.

“It could be difficult for McAfee's rivals to compete,” sources told the Journal.

Intel largely dominates the global microprocessor market, which are used in PCs.

There has been speculation that, if Intel would embed security products on chips, would any be only able to work with McAfee products, the Journal said. It is also possible there would be pop-ups for McAfee software, the newspaper added.

However, the companies are still confident in the deal.

"We believe the combination of Intel and McAfee will prove important in achieving breakthrough innovations in security and look forward to discussing in more detail our product plans and strategies after the transaction is closed," Kevin Sellers, Intel’s vice president of investor relations, said in a company statement.

Intel predicts the deal will close in the first half of 2011.

European Union regulators expect to reach a decision by Jan. 12, 2011, on whether they want to conduct a longer investigation into the deal.

Meanwhile, the U.S. Federal Trade Commission cleared Intel’s acquisition of McAfee, according to Intel.

TechZone360 reported earlier this year that the deal would generate income for investors. TechZone360 blogger and industry analyst, Peter Radizeski, pointed out: Intel bought $2 billion in revenue for almost $8B. "Intel knows that the PC market is almost exhausted. It needs a new market," he added.

McAfee said it will still be focused on security products after the deal.

“The combination of Intel and McAfee is not about moving away from McAfee’s traditional security business – it is about being able to activate the current and future security functionality of silicon through a mature security software offering,” George Kurtz, CTO of McAfee, said in a blog post earlier this year. “This will result in increased performance and protection for end users across all devices, and it is our belief that this is good for the industry, our customers and our partners.”

Ed Silverstein is a TechZone360 contributor. To read more of his articles, please visit his columnist page.

Edited by Tammy Wolf

TechZone360 Contributor

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