Tech

NortonLifeLock’s $8bn Avast deal hits snag as UK regulator raises concerns

The UK’s competition regulator has raised concerns that an $8 billion merger between US-based NortonLifeLock and London-listed Avast cybersecurity firms could reduce competition and increase prices for customers.

The cash and stock deal, announced in Augustwas valuing London-listed Avast at the time at $8.1 to $8.6 billion and was set to found a company that would sell online security software to half a billion customers.

However, the Competition and Markets Authority warned on Wednesday that the proposed merger could limit customer choice and ultimately increase prices as there are no significant competitors.

The news sent Avast shares down as much as 11 percent on Wednesday morning, while NortonLifeLock fell almost 6 percent in US premarket trading.

“NortonLifeLock’s proposed purchase of Avast could result in reduced competition in the UK and ultimately a worse deal for consumers when looking for cyber security software,” said David Stewart, executive director of the CMA.

The regulator has now urged the companies to address those concerns to avoid an in-depth investigation that could delay the merger until mid-2022 or derail it altogether.

But NortonLifeLock said it has no intention of proposing remedies and was “surprised” by the decision. The Arizona-based company has already received approval for the deal in the US, Spain and Germany.

“We believe this transaction can only benefit consumers around the world, including in the UK, through greater innovation and greater consumer freedom and choice beyond the major technology platform providers in the burgeoning cybersecurity market,” NortonLifeLock said in a statement .

Avast CEO Ondrej Vlcek will become president of the combined group if deal is approved © Tomas Nosil

Avast said in a statement it continues to believe in the “strategic logic for the merger” and continues to work with the CMA.

“We continue to believe this transaction will only benefit UK consumers,” the company said.

While the merger could be painful in the near term — Norton chief executive Vincent Pilette has hinted he plans to cut 1,000 jobs from the combined group — it could benefit the combined companies more in an increasingly crowded space like big tech groups Influence as Google, Microsoft and Apple increasingly build more security measures directly into their operating systems.

Founded in Prague, Avast sells freemium software designed for online privacy. The deal would result in its CEO, Ondrej Vlcek, becoming president of the merged entity after he does so ran the company by a revenue-boosting pandemic in which more consumers were spending more time online.

NortonLifeLock, a leader in identity theft protection, had expected the deal to close by April 4.

NortonLifeLock’s $8bn Avast deal hits snag as UK regulator raises concerns Source link NortonLifeLock’s $8bn Avast deal hits snag as UK regulator raises concerns

Related Articles

Back to top button