(Bloomberg) -- Cisco Systems Inc. agreed to buy software company Splunk Inc. in a deal valued at about $28 billion, marking the computer networking equipment maker's biggest acquisition.
Cisco will pay $157 a share in cash, the companies said in a statement Thursday. That represents a 31% premium to Splunk's previous closing price on Wednesday. The combination will help make companies more resilient to cybersecurity threats, according to the statement.
“Our combined capabilities will drive the next generation of AI-enabled security and observability,” said Chief Executive Officer Chuck Robbins.
The two had held talks in the past, but discussions fell apart last year, Bloomberg reported.
Shares of Cisco fell about 5% in premarket trading on the news.
The company has been expanding its software and services business in an attempt to rely less on its hallmark networking hardware. The Silicon Valley giant has traditionally generated the bulk of its revenue from equipment that forms the backbone of computer networks, but that's been changing.
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