The CNMC has authorized the purchase of Avast by Norton announced on August 11. The operation, as its protagonists revealed then, would reach a figure that ranged between 8,100 and 8,600 million dollars (between 7,250 and 7,696 million euros) in cash and in shares, and would create a cybersecurity giant. The combined company, they said, will have about 5,000 employees and 500 clients globally.
The Spanish body has determined that the operation “does not significantly alter the competitive situation in the market for cybersecurity solutions for consumers.” And, for this reason, it has decided to authorize the transaction “in the first phase and without commitments”.
NortonLife, valued on the stock market at more than 15,700 million dollars, is an American company that offers global cybersecurity solutions (software and services) for consumers through different paid subscription models. It is especially strong in protecting against identity theft. And Avast is a multinational of Czech origin specialized in the development of cybersecurity software, with great strength in privacy tools. The latter’s business model is based on freemium solutions, offering both free services and paid services with additional features. Avast is particularly active in the device care and device cybersecurity solutions markets.
“Given the ongoing discussions between the UK authority and the Spanish antitrust authority and NortonLife’s calendar for the end of the year, it has been decided to postpone the closing of the operation,” said this company a few days ago, marking the date of the April 4 as the target for the final closing of the transaction. The way has been cleared, at least in Spain.
As detailed by the CNMC, both globally, in the European Economic Area, and in Spain, Norton and Avast present the main horizontal overlaps in the broad market of cybersecurity solutions for consumers and, more specifically, in the narrow market of security solutions for devices. The combined shares of the parties are also relevant in the consumer VPN (virtual private network) solutions and device care solutions market, although the transaction share additions are small.
The Spanish organization clarifies, however, that the analyzed quotas “could overestimate the real weight of the parties because they do not include the existence of free cybersecurity solutions, the existence of closed ecosystems or solutions integrated by default in the devices. In this sense, Microsoft Defender device security software is worth mentioning, ” he says.
The CNMC also points out that large technology companies ( Big Tech ) exert considerable competitive pressure in the market, as well as in the development of new innovative solutions, as reflected in the market test carried out by the CNMC. And he adds that increasing digitization and the threat of cybercrime are, in turn, driving market growth and the development of new cybersecurity solutions.
The objective of the company resulting from the Vicente operation is to be listed on the Nasdaq, where Norton is already listed. Avast does it on the London Stock Exchange.
As the companies announced last year, they expect the deal to result in synergies of $280 million in annual gross costs and lead to a double-digit increase in earnings per share. The combined company will seek to reduce its workforce to around 4,000 employees in the two years following the closing of the operation. The company will be based in Prague and in the city of Tempe, Arizona (USA).