Intel to buy McAfee

Intel will make its biggest acquisition in 40 years with spending $7.7 billion on security software maker McAfee Inc to bolster the appeal of its chips in a changing technology market.

According to Reuters, Intel dominates the market for PC microprocessors. But as consumers increasingly use handheld gadgets like smartphones and Apple’s iPad to connect to the Internet, Intel’s offerings are at a disadvantage to more power-efficient chips from rivals.

For the moment, the biggest advantage in the McAfee deal may be Intel’s ability to sell McAfee’s software to PC customers. Intel supplies roughly 80 percent of the microprocessors used in PCs.

McAfee, the No. 2 security software maker behind Symantec, reported revenue of $2 billion in 2009 and has been working with Intel on a variety of projects for the last 18 months.

Intel expects the transaction to close once it gains McAfee shareholder approval and regulatory clearance. Executives said they hoped to close the deal by the end of the year.