Avast to buy AVG for $1.7 billion

Security vendor Avast will acquire rival AVG Technologies for US$1.3 billion (A$1.7 billion) in cash to improve its reach in the mobile and small business markets worldwide.

Avast chief executive Vincent Steckler noted the similarities between the two security vendors: both originated in the Czech Republic in the late 1980s as antivirus companies, and pioneered the free distribution of security products.

While Steckler said he was unable to discuss how the two companies will operate after being combined, he said he believed the larger user base resulting from the acquisition would improve protection for customers.

"We will have over 250 million PC/Mac users enabling us to gather even more threat data to improve the protection to our users. In mobile, our combined 160 million mobile users will be used to improve protection as well as to provide an important stepping stone into the Internet of things," Steckler said.

He said the acquisition of AVG would bring in mobile technology designed to protect families on the internet, as well as a larger geographic footprint that would enable better technical support.

"We believe that joining forces with Avast, a private company with significant resources, fully supports our growth objectives and represents the best interests of our stockholders," AVG chief executive Gary Kovacs said in a statement.

Avast plans to fund the transaction using cash on hand and debt financing. It has received financing commitment of US$1.68 billion from Credit Suisse Securities, Jefferies and UBS Investment Bank, it said.