The US-based cybersecurity company NortonLifeLock has agreed to buy its rival UK-headquartered Avast for up to $8.6 billion in cash and shares to build a leader in consumer security software.
Last month, the companies confirmed merger talks and stated that the combined group would unite their complementary strengths for over 500 million cyber safety customers as well as create clear leadership in the field.
Mr. Vincent Pilette, chief executive of NortonLifeLock, said the company was strong in identity theft protection whereas Avast was strong in privacy. “We both have the vision of a common platform, where frankly we really have scratched the surface,” he added.
Avast is a pioneer of “freemium” software, whereby basic applications are free and subscribers pay for premium features. It had 435 million active users at the end of 2020, of whom 16.5 million were paying.
NortonLifeLock, previously known as Symantec, was renamed after it sold its enterprise business to Broadcom in 2019, leaving it focused on consumers. It has a larger premium business selling products to combat viruses, spyware, malware and other online attacks.
Freemium and premium could successfully coexist, with the former educating consumers about the value of security and creating demand for advanced products, Mr. Pilette said.
The combined company will have about 5,000 workers but will seek to cut that to around 4,000 in the two years after the deal closes, expected in 9 to 12 months. The companies said the merger was estimated to deliver about $280 million of annual cost savings.
Avast shareholders will be entitled to receive a mix of cash and shares, with majority cash and majority stock options available, the companies said.
Avast Chief Executive Mr. Ondrej Vlcek stated that the shareholders of Avast would hold 14 percent to 26 percent of the combined company depending on the payment option.
The combined company’s headquarters will be in both Prague and the US city of Tempe, Arizona. Its shares will be listed on the Nasdaq in the US.