What just happened? Cybersecurity companies NortonLifeLock and Avast, announced this week a merger that values Avast's shares at between $8.1 and $8.6 billion. A joint press release claims the combined entity will have over 500 million users. NortonLifeLock was formed from a spin-off from Symantec in 2019, while Avast acquired rival security software company AVG in 2016.
Once Norton acquires the Czech antivirus developer, the new firm will be dually headquartered in Tempe, Arizona, USA, and Prague, Czech Republic. NortonLifeLock CEO Vincent Pilette and CFO Natalie Derse will remain CEO and CFO respectively. Avast CEO Ondřej Vlček will become president of NortonLifeLock. Avast co-founder and current director Pavel Baudiš will become an independent director on the NortonLifeLock board.
According to the press release, both companies believe Avast's antivirus and privacy capabilities will nicely complement NortonLifeLock's identity theft prevention services.
“This transaction is a huge step forward for consumer Cyber Safety and will ultimately enable us to achieve our vision to protect and empower people to live their digital lives safely,” Pilette said in the press release. "With this combination, we can strengthen our Cyber Safety platform and make it available to more than 500 million users."
In recent years Avast has been scrutinized based on privacy concerns. Last year we reported Avast's free AVG antivirus software had been caught recording users' web browsing data and sending it to subsidiary Jumpshoot, which then sold it to clients like Google, Microsoft, or Pepsi. Avast subsequently shut down Jumpshoot, letting go of hundreds of employees. The Telegraph (paywall) is worried this new deal with NorthLifeLock could put a further 1,000 jobs at risk, mostly in the United States and Europe, including around 200 jobs in the UK.
According to The Telegraph, Avast CEO Ondřej Vlček doesn't expect the deal to run into significant obstacles because the entrance of big tech into cybersecurity has expanded the market compared to when companies like Norton and Avast started out. "We feel confident we will be able to explain that to regulators and get this through all the approvals that are needed," he said.
"Through our well-established brands, greater geographic diversification and access to a larger global user base, the combined businesses will be poised to access the significant growth opportunity that exists worldwide,” added Vlček.