Intel seen winning EU approval for McAfee deal: sources

BRUSSELS Thu Jan 20, 2011 3:04pm EST

Intel CEO Paul Otellini talks during the company's unveiling of its second generation Intel Core processor family during a news conference at the Consumer Electronics Show (CES) in Las Vegas January 5, 2011. REUTERS/Rick Wilking

Intel CEO Paul Otellini talks during the company's unveiling of its second generation Intel Core processor family during a news conference at the Consumer Electronics Show (CES) in Las Vegas January 5, 2011.

Credit: Reuters/Rick Wilking

Related Topics

BRUSSELS (Reuters) - Intel Corp is set to win EU approval next week for its $7.68 billion purchase of security software maker McAfee Inc after offering more concessions to ease antitrust concerns, two sources with direct knowledge of the matter said on Thursday.

The company has already secured clearance from the U.S. Federal Trade Commission to acquire McAfee, the world's No. 2 purveyor of anti-virus software after Symantec Corp. McAfee's other competitors include Finland's F-Secure, and German companies Avira and G Data.

Intel, the world's No. 1 chipmaker, had offered some concessions to the European Commission and in recent days proposed more remedies after complaints by some of McAfee's rivals that they were inadequate, the sources said.

"The Commission's clearance is likely next week," one of the sources said.

The second source said the main element of Intel's concessions related to interoperability features that will allow products from McAfee's competitors to function on Intel products without restrictions.

Last week, Intel Chief Executive Paul Otellini said the acquisition could close in the first quarter if the Commission had no more requests for information.

Intel spokesman Chuck Mulloy told Reuters on Thursday that Intel expects the transaction to close "before midyear" but he would not comment on the new concessions.

The European Union regulator had been concerned that Intel might embed certain elements of McAfee's virus-fighting technology in its widely used microprocessors for personal computers, giving it an unfair competitive advantage, two other persons familiar with the case told Reuters earlier this month.

Intel's plan to buy McAfee underscores how security has become a concern in a world of Web-enabled devices.

Swallowing McAfee would give Intel the opportunity to sell high-profit security software alongside its microprocessors to its traditional PC customers.

Intel's planned acquisition of McAfee also reflects a trend in the technology sector for hardware and software companies to merge in order to offer clients one-stop solutions.

"The lines and distinctions between hardware and software are blurring -- what's being implemented in software, what's being implemented in hardware and how to bring very vast, rapidly evolving ecosystems together," said Alex Gauna, an analyst at JMP Securities.

EU Competition Commissioner Joaquin Almunia is expected to hold a news conference on Wednesday to announce the decision in the case.

Intel shares were trading 0.8 percent lower at $20.84 while McAfee was up 0.7 percent.

(Additional reporting by Noel Randewich in San Francisco; Editing by Bate Felix, David Holmes and Steve Orlofsky)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.