European regulators say their approval is conditional upon Intel following through on promises to ensure a level playing field for McAfee rivals in the software security space.
Intel received the European Union's approval for its $7.68 billion
acquisition of security software vendor McAfee after alleviating regulator
fears that the deal would create an unfair competitive advantage over McAfee
, the European Commission-the antitrust arm of the EU-said the
concessions made by Intel should ensure fair competition in the marketplace,
and that the approval of the deal was conditional on Intel following through on
commitments submitted by Intel strike the right balance, as they allow
preserving both competition and the beneficial effects of the merger. These
changes will ensure that vigorous competition is maintained and that consumers
get the best result in terms of price, choice and quality of the IT security
products," Joaquin Almunia, the commission vice president in charge of
competition, said in the statement.
expects the deal to close during the current quarter.
officials announced in August 2010 their intent to buy McAfee, which is second
behind Symantec among the world's largest security software makers. Intel is
working hard to move beyond its core PC and server processor businesses into
new and fast-growing markets, including smartphones, tablet PCs and embedded
devices. With such highly connected devices, security is a key issue, and Intel
officials see the ability to integrate security capabilities onto the chips as
an advantage in their looming competition with the likes of Qualcomm, Samsung
and Texas Instruments.
companies build chips based on designs
from ARM Holdings
, which currently are found in most smartphones and
U.S. Federal Trade Commission gave
to the deal in December 2010, but European regulators had more
concerns. The EC-and McAfee rivals-worried that if Intel were to tightly embed
the McAfee technology onto its chips and chip sets, it could put other security
software vendors at a significant disadvantage, considering Intel's dominance
in the industry. Intel owns more than 80 percent of the global processor
was less an issue of overlapping products, and more about the overall impact of
having two such major tech companies merging their businesses, the EC said.
There was a concern that offerings from Symantec and other vendors would not
work as well with Intel products if they were embedded with McAfee technology.
In addition, the regulators worried about what would happen to the competitive
balance in the market if McAfee products no longer worked with products from
Intel rivals, such as Advanced Micro Devices.
similar concern was raised last year by several rivals and regulatory bodies,
which accused Intel of at one time altering some components-such as
compilers-so that they would not work as well with non-Intel products. Intel
has faced a number of lawsuits over its business practices, and while the
company has settled most of them, company executives have denied their
practices were unfair or violated any antitrust laws.
allay those concerns, Intel agreed to ensure that other security software
makers will be able to run their products on its chips and chip sets in the
same way that McAfee will. Intel officials also said they will not do anything
to impede those security solutions from running on their products, and will not
hinder the performance of McAfee products when running on systems powered by
plans to run McAfee as a separate business, and McAfee will continue selling
its products to third parties.
efforts to expand its reach into the mobile device world are being driven not
only through internal efforts-such as with its Atom processor platform-but also
through acquisitions such as the McAfee deal and Intel's proposed $1.4
billion purchase of Infineon's wireless business
a research note issues Jan. 26, analysts at Deutsche Bank said they expect
Intel to now shift its focus from acquisitions to execution.
believe Intel is now finished with large acquisitions and will shift focus to
executing a product roadmap with McAfee," the analysts said in the note, adding
that "Intel has been collaborating with McAfee for 18 months and expects to
launch the first products from the collaboration in early 2011."