The transaction is now subject to certain regulatory approval and other customary closing conditions, which also includes approval from Splunk’s shareholders.
It is expected to complete by the end of third quarter of calendar year 2024.
The deal will allow Cisco and Splunk to help organisations in managing, protecting and unlocking the value of data, while maintaining digital resilience.
Splunk’s security capabilities also complement Cisco’s current portfolio, allowing the two firms to provide security analytics and coverage to devices, applications and clouds.
Additionally, Splunk’s complementary expertise, when combined with Cisco’s capabilities, will provide observability across hybrid and multi-cloud environments, resulting in a smooth application experience for users to power their digital businesses.
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Cisco and Splunk said that their combined capabilities will facilitate greater investments in new solutions, innovation and increase global scale to address the needs of companies of all sizes.
Following the deal completion, Splunk’s president and CEO Gary Steele will join Cisco’s executive leadership team and report to Cisco chair and CEO Chuck Robbins.
Robbins said: “Our combined capabilities will drive next-generation of AI-enabled security and observability.
“From threat detection and response to threat prediction and prevention, we will help make organisations of all sizes more secure and resilient.”
The deal is projected to be cash flow positive and gross margin accretive in the first fiscal year after the completion of Splunk’s acquisition.
Tidal Partners is serving as Cisco’s financial advisor, while Cisco’s legal and regulatory counsel are Simpson Thacher & Bartlett and Cravath, Swaine & Moore, respectively.
Splunk’s financial advisors are Qatalyst Partners and Morgan Stanley & Co, while Skadden, Arps, Slate, Meagher & Flom are serving as legal counsels.
Steele said: “Together, we will form a global security and observability leader that harnesses power of data and AI to deliver excellent customer outcomes and transform industry.”