Avast Software to buy AVG Technologies for $1.3bn cash

Prague-based Avast Software has agreed to buy Netherlands' AVG Technologies for $1.3bn cash, adding mobile phone-protection software to its existing offering as it moves into the growing Internet of Things (IoT) market.

CVC Capital Partners-backed Avast has begun the tender offer for AVG at $25 a share, which was a third above Wednesday's closing price in New York.

Both companies are industry pioneers founded in the Czech Republic in the late 1980s and early 1990s, that expanded internationally in the 2000s.

Avast said it was pursuing the deal to gain scale, technological depth and geographical breadth so that the new organisation could be in a position to take advantage of emerging growth opportunities in Internet Security as well as organisational efficiencies.

"The technological depth and geographical reach will help Avast serve customers with more advanced security offerings in the core business and new innovations in emerging markets, such as security for IoT devices," the two companies said in a statement.

"Combining Avast's and AVG's users, the organisation will have a network of more than 400 million endpoints, of which 160 million are mobile, that act as de facto sensors, providing information about malware to help detect and neutralize new threats as soon as they appear.

"This increase in scale will enable Avast to create more technically advanced personal security and privacy products."

The deal had been unanimously approved by the Management Board and Supervisory Board of Avast. The Management Board and Supervisory Board of AVG approved and support the transaction and recommend the offer for acceptance to the AVG shareholders.