No. 1 chipmaker Intel (INTC) is parsing the sale of its McAfee security unit less than three months after it announced a 12,000-job cut on weakening PC sales, according to anonymous sources cited Monday by the Financial Times.
Intel bought McAfee antivirus software for $7.7 billion in 2010 with the goal of interlacing the security software into its chips. That plan hasn't come to fruition. Intel is now reportedly in talks with bankers for what could be a record security deal, the FT reported.
Representatives of Intel declined comment to IBD.
Last year, chip sector M&A hit a fever pitch, topping $100 billion. But 2016 hasn't been huge for semiconductor or cybersecurity deals.
In chips, Apple (AAPL) supplier Broadcom (AVGO) sold its Internet of Things unit to Cypress Semiconductor (CY) and its wireless infrastructure unit to MaxLinear (MXL).
On the security side, Symantec (SYMC) is acquiring Blue Coat Systems, and IBM (IBM) bought incident response firm Resilient Systems. Symantec also reportedly put in a low-ball offer on FireEye (FEYE).
The Blue Coat deal will help Symantec gain market cap, where it trails Check Point Software Technology (CHKP) but leads Palo Alto Networks (PANW).
For Intel, the potential sale of its McAfee unit -- renamed Intel Security -- follows disappointing Q1 sales and a plan to cut 11% of its workforce globally, as the longtime No. 1 maker of computer chips redirects away from the slowing PC segment.
PC sales comprised 55% of Intel's Q1 sales, but those sales have struggled in recent quarters as tablets and two-in-ones gain popularity. Now, Intel is pivoting to focus on high-growth areas like data centers, the Internet of Things and memory.
Intel stock closed down 2.7% at 30.71 on the stock market today, after plunging 4.4% Friday as stocks markets worldwide reeled from the U.K.'s vote to exit the European Union. On Thursday, Intel stock topped its 32.85 buy point from a flat base, but shares are now in sell territory.
