Avast acquires rival AVG for $1.3 billion to create a security software giant

Security software giant Avast Software has acquired rival AVG Technologies. Avast will pay $25 cash for each of AVG’s outstanding ordinary shares in a deal amounting to around $1.3 billion.

Founded out of Czechoslovakia in the early 1990s — initially called Grisoft — AVG has grown to become one of the biggest brands in desktop and mobile security apps. It also offers a range of related services, including AVG Cleaner for Android and Mac. The company is now headquartered in Amsterdam.

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Avast’s origins can also be traced back to the old Czechoslovakia, as the company was founded out of Prague in 1988. It has since emerged as one of the leading online security firms and is reported to control more than a fifth of the global antivirus software market. Though it is better known for its security software, Avast has branched out into other verticals — earlier this year, the company launched a new initiative to reveal the best Wi-Fi hotspots, using crowdsourced data.

Avast said that it’s acquiring AVG to “gain scale, technological depth, and geographical breadth” and so it can “take advantage of emerging growth opportunities in internet security, as well as organizational efficiencies.”

The combined company will have access to “400 million endpoints” — that is, devices that have some form of Avast or AVG application installed. Almost half of those are mobile, which is key in a world that is increasingly shifting away from the desktop. Access to more devices will serve the joint company a bigger pool of data on malware, meaning it should be better positioned to offer improved security products.

“We are in a rapidly changing industry, and this acquisition gives us the breadth and technological depth to be the security provider of choice for our current and future customers,” said Vincent Steckler, CEO of Avast. “Combining the strengths of two great tech companies, both founded in the Czech Republic and with a common culture and mission, will put us in a great position to take advantage of the new opportunities ahead, such as security for the enormous growth in IoT.”

Though the transaction has been given the green light by the boards of both companies, AVG is a publicly traded firm (on the New York Stock Exchange), which means its shareholders must also approve the deal. But Avast says it expects the transaction to close between September and October 2016.