Share prices in Czech cyber security giant Avast jump due to UK approval of takeover deal

The takeover of Czech-based antivirus company Avast by U.S. rival NortonLifeLock is one step closer to becoming a reality. Britain’s anti-monopoly body Competition and Markets Authority (CMA) has tentatively approved the takeover.

The office will issue a final decision on Sept. 8, according to today's statement. The price of shares in Avast rose on the Prague Stock Exchange in response to the news.

At 10 a.m. Avast's shares rose by 38 percent and traded around CZK 200 per share, Cyrrus analyst Tomáš Pfeiler told the Czech News Agency (ČTK).

"The way to the completion of the transaction is clear at this moment. The decision of the office was made a little faster than expected. The original assumptions spoke of issuing an opinion by the end of this year," Pfeiler said.

Shares in Avast should stop trading on the Prague bourse on Sept. 9, according to a preliminary draft schedule of the merger. Avast shares will be withdrawn from the stock exchange and NortonLifeLock will issue new ones, according to a timetable in a report from the CMA. Avast spokeswoman Dominika Kalašová told ČTK that the companies hope to follow that schedule.

The companies announced plans to merge in an $8.6 billion deal in August 2021. The agreement has already been approved by anti-monopoly authorities in the U.S., Spain, and Germany, news agency Reuters reported.

Both Avast and NortonLifeLock offer antivirus software, privacy software such as VPNs, and identity protection software. The CMA had initial reservations that the merger would reduce competition in this sector and harm the British consumer. A more in-depth investigation launched in March found that the deal does not raise competition concerns in the UK.

“The CMA’s investigation has found that the supply of cyber safety software to consumers is rapidly evolving. Providers of both paid-for and free services are continually developing and improving their products over time to meet different and changing customer needs,” the CMA said in a statement.

They found that there was significant competition from other providers such as McAfee and Microsoft. They added that Microsoft holds a unique position in the market as the owner of the Windows operating system, and its cyber safety software is an important alternative for consumers.

“In recent years, Microsoft has improved its free built-in security application so that it now offers protection which is as good as many of the products offered by specialist suppliers,” the CMA said.

The new company will be headquartered in Prague and in Tempe, Arizona. It will offer services to more than 500 million users.

Avast is a Czech multinational antivirus company. It was founded by Pavel Baudiš and Eduard Kučera in 1988 as a cooperative and had been a private company since 2010. In July 2016, Avast acquired competitor AVG Technologies, which was based in Brno. Shares in Avast began trading on the Prague Stock Exchange in May 2018.

Avast supplies security programs for computers and mobile devices and, according to experts, ranks among the world's best. Avast products are used by over 435 million users worldwide, largely free of charge. The firm employs over 1,700 people. It says it blocks 1.5 billion cyberattacks every month.

NortonLifeLock is based in Tempe, Arizona. The company was previously known as Symantec. In 2019, it sold its enterprise security division to the American chip manufacturer Broadcom, and changed its name to the current one. Its most prominent business items are now Norton antivirus and LifeLock identity theft protection products.