Intel buying McAfee

Chip maker Intel Corp said Thursday it is buying computer-security software maker McAfee Inc. for $7.68 billion, or $48 per share.

The per-share price represents a 60 percent premium over McAfee's Wednesday close of $29.93. McAfee shares surged 58 percent after the deal was announced Thursday to hit $47.42 in premarket trading. Intel shares slipped 2.5 percent to $19.11.

Intel, which is based in Santa Clara, California, said the deal highlights "that security is now a fundamental component of online computing."

"With the rapid expansion of growth across a vast array of Internet-connected devices, more and more of the elements of our lives have moved online," Intel CEO Paul Otellini said. "In the past, energy-efficient performance and connectivity have defined computing requirements. Looking forward, security will join those as a third pillar of what people demand from all computing experiences."

Intel said the deal with hurt earnings slightly in the first year the companies are combined. Excluding costs and other one-time items related to the acquisition, Intel predicts the deal will slightly boost earnings next year and improve after that.

Both boards of directors have unanimously approved the deal. The deal still requires McAfee shareholder approval and regulatory clearances.

McAfee, also based in Santa Clara, is one of the world's largest security technology companies with about $2 billion in revenue last year.

Intel has made a series of recent software acquisitions including companies that specialize in gaming, visual computing, embedded device and machine software.

Last month, Intel Corp. reported its largest quarterly net income in a decade as the chipmaker benefited from a stronger computer market and more sophisticated factories.