By Paul Sandle and Krystal Hu
LONDON/NEW YORK (Reuters) – US digital security company NortonLifeLock today announced it has bought London-listed rival Avast for up to $8.6 billion in a cash-and-stock transaction that will create a global leader in consumer security software.
The companies, which announced merger talks last month, said the combined group will join complementary forces and create a company with more than 500 million customers.
Vincent Pilette, CEO of NortonLifeLock, said his company is strong on identity theft protection while Avast is strong on privacy.
“The two companies have a vision of a common platform, where frankly we only cover the surface,” said the executive.
Avast shares soared more than 4% in London after the deal was announced. At 12:35 pm (Eastern time), the shares exhibited an increase of 3.4%.
Founded and headquartered in Prague, Czech Republic, Avast is a pioneer in the “freemium” business model, in which basic features are free and the user has the option to subscribe to more sophisticated tools. The company had 435 million active users at the end of 2020, of which 16.5 million were paying.
NortonLifeLock, formerly known as Symantec, was renamed after it sold its business-oriented division to Broadcom in 2019, leaving the company focused on end users. The company sells a larger base of “premium” businesses, selling antivirus and anti-spyware, malware and other online threats.
Pilette said freemium and premium modes can successfully coexist, with the former playing the role of educating customers about the value of security and creating demand for more advanced products.
The combined company will have nearly 5,000 employees, but will seek to reduce that number to around 4,000 in the two years after the transaction is completed, Pilette said.
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