UK antitrust regulator provisionally clears NortonLifeLock’s $8.1bn+ merger with Avast

The UK’s antitrust regulator, the Competition and Markets Authority, has provisionally cleared the proposed merger of anti-virus makers NortonLifeLock Inc. and Avast plc.

CMA announcement his decision today. The news sent Avast shares up more than 40%, while NortonLifeLock shares rose around 6%.

NortonLifeLock, based in Tempe, Arizona, and Avast, based in Prague, both provide antivirus software for the consumer market. They also offer a variety of other cybersecurity products. Companies provide virtual private network, or VPN, software and tools that make it easy to download updates for programs running on a device.

NortonLifeLock was known as Symantec Corp. until 2019. That year, Symantec sold its enterprise cybersecurity business to Broadcom Inc. in a $10.7 billion deal. The company was later renamed NortonLifeLock and updated its strategy to focus primarily on the consumer market.

NortonLifeLock and Avast announcement their merger plans last August. According to the companies, the deal would value Avast between $8.1 billion and $8.6 billion.

The companies initially sought to complete the acquisition by April. However, the transaction was delayed after the CMA raised antitrust concerns. The regulator launched an investigation in March to assess whether NortonLifeLock’s merger with Avast can reduce competition in the UK cybersecurity market.

The CMA decided to provisionally clear the merger today after its investigation concluded the deal did not raise antitrust concerns. In particular, the regulator found that NortonLifeLock and Avast will continue to face strong competition in the UK after the merger closes.

The CMA appointed McAfee Corp. as one of the main sources of competition. McAfee, who was acquired by a consortium of investors last year for more than $14 billion, provides cybersecurity software for the consumer and enterprise markets. According to the CMA, the company resulting from the merger of NortonLifeLock and Avast will also face competition from a “range of other suppliers”.

The growing line of cybersecurity tools from Microsoft Corp. also factored into the CMA’s decision to provisionally approve the deal. Microsoft’s cybersecurity software for Windows, the regulator determined, has in recent years become competitive with several standalone antivirus products. Additionally, the CMA believes that a series of new tools recently introduced by the company are “likely to further strengthen Microsoft as a competitor in the future.”

“After gathering further information from the companies involved and other industry players, we are currently confident that this agreement will not worsen the options available to consumers,” said Kirstin Baker, president of the group of d CMA survey. “As such, we have tentatively concluded that the agreement can go forward.”

The CMA invited interested parties to submit comments on its decision by August 21. The regulator plans to issue a final report on NortonLifeLock’s proposed merger with Avast by September 8. update released today, the companies said they expect the deal to close on September 12 at the earliest

When the merger was originally announced last year, NortonLifeLock and Avast expected the combined company to have more than 500 million users worldwide. Additionally, the agreement is expected to facilitate annual cost synergies of $280 million. NortonLifeLock and Avast also anticipate “additional upside potential through new reinvestment capability” that will allow for increased investment in product development and growth initiatives.

Photo: NortonLifeLock

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