UK Regulator Puts Brakes 6Bn Takeover Antivirus Firm Avast
It is doubtful whether the antivirus firm Avast would be acquired by American rival company Norton LifeLock following thewarning of regulatory authorities.
A tie-up between the two companies was announced last August for $6 billion pounds and the process is yet to start. Brakes were lately pumped by CMA, the Competition and Markets Authority, as the deal is a concern of competition and a proper investigation is required.
According to the watchdog, the Prague-based Avast and Norton are rivals and the deal may result in the least competition in the market.
David Steward, executive director of CMA, said people are now living mostly in the virtual or online world and it is important to have competitive security software for cyber protection and the deal may reduce the competition as well as turn worse for consumers.
The two companies have been asked to submit their proposals to the authority and address the concerns in it to avoid any detailed probe.
Interactive Investor head of investment Victoria Scholar said the involvement of CMA is a spanner and it could be out of fear of cyber attack or warfare that has been lately sparked due to the Russian-Ukraine conflict.
With the move, the shares of Avast went down to as much as 13.3 percent and it was the level was lowest in the period of the past four months. The stocks rebounded later and jumped 11 percent higher compared to last year's mid-July level with the news of a potential tie-up with Norton.
Arizona-based Norton said the decision of CMA is surprising to them as they were confident the merger would have been approved. It has no plan to make proposals to the authority.
Even though the CMA intervention has made the deal complicated, it is believed the tie-up could be completed later this year. The original date for the completion was April 4.
Avast is a multinational cybersecurity firm from Prague, Czech Republic. It was founded in 1988 by Pavel Baudis and Eduard Kucera, which research and make safety software. It develops artificial intelligence and machine learning. It currently is equipped with over 435 million active users a month. The company has more than 1,700 employees in 25 offices across the world.
NortonLifeLock is a computer software company founded in 1982 as Symantec Corporation by Gary Hendrix. It is headquartered in Tempe, Arizona, US. It is a constituent of the S&P 500 Index and listed in the Fortune 500 list.