Cisco-Splunk deal: Europe sets March deadline for antitrust decision

The regulator is currently scrutinising whether the acquisition might negatively impact competition

The European Commission has set a critical deadline of 13th March for its decision regarding Cisco Systems' $28 billion acquisition bid for cybersecurity giant Splunk.

As reported by Reuters, the decision was revealed in the Commission's latest filing and would determine whether the acquisition gets the green light or faces further scrutiny.

As per the filing, the deal is presently undergoing investigation, meaning that regulator is currently scrutinising whether the acquisition might negatively impact competition.

The upcoming decision on 13th March will determine whether the Cisco-Splunk deal receives clearance outright, with or without conditions, or if it triggers a full-scale investigation due to concerns about its potential impact on market competition.

Cisco's move to acquire Splunk represents one of the most substantial transactions of the past year.

The deal, announced in September 2023, aims to merge the "complementary capabilities" of both companies.

Splunk boasts an impressive clientele list including corporate giants like Coca-Cola, Intel and Porsche, with over 15,000 customers relying on its cybersecurity solutions.

The relationship between Cisco and Splunk dates back a decade, marked by an established data security partnership. However, the proposed acquisition would significantly deepen this collaboration, promising to combine their strengths and offer enhanced services to customers.

Threat detection, prediction, and prevention are key areas of focus, with Cisco poised to expand its security analytics capabilities through the Splunk platform.

Moreover, the deal holds strategic importance for Cisco as it seeks to diversify its revenue streams and reduce reliance on its network equipment offerings, which have grappled with supply chain disruptions and demand fluctuations.

Executives from both Cisco and Splunk have expressed optimism about the deal's potential, emphasising the transformative impact it could have on the industry.

"We're excited to bring Cisco and Splunk together. Our combined capabilities will drive the next generation of AI-enabled security and observability," Chuck Robbins, chair and CEO of Cisco, said last year.

Splunk CEO Gary Steele hailed the move as a pivotal moment in Splunk's growth journey, envisioning the creation of an industry-leading organisation harnessing the power of data and AI to drive customer outcomes.

"Together, we will form a global security and observability leader that harnesses the power of data and AI to deliver excellent customer outcomes and transform the industry," Steele said.

Should the merger occur, Cisco and Splunk would become one of the world's largest software companies.

But regulatory hurdles loom large, with EU regulators closely scrutinising mergers and acquisitions in the tech space to prevent the consolidation of market power to the detriment of smaller competitors.

Adobe's recent decision to abandon its plans to acquire Figma serves as a cautionary tale, highlighting the regulatory pushback faced by tech giants in Europe.

The deal had faced serious scrutiny from regulators since it was announced in September 2022, with concerns about its Adobe eliminating a major rival.

In December, Adobe announced that the deal would be abandoned as there was "no clear path" for regulatory approval. Consequently, Adobe was obliged to pay a $1 billion termination fee to Figma as part of this decision.

Last year, Microsoft had to restructure its $69 billion deal to acquire Activision Blizzard to secure approval from regulators. Under a new agreement, Microsoft granted the rights to distribute Activision's games on consoles and PCs via cloud gaming to French video game publisher Ubisoft.