Intel is set to acquire security software vendor McAfee for £5 billion ($7.68 billion) in cash.
BBC News reports that Intel has decided to pay McAfee $48 per share, more than 50 per cent higher than its closing price on Wednesday.
The company warned that the acquisition may result in reduced net earnings in the first year after the deal.
The move will mark Intel's entry into the security software maker and will allow it to integrate sophisticated security technology with its existing wireless products.
Intel believes that security is emerging as one of main computing requirements, along with operational efficiency and network connectivity.
Company CEO Paul Otellini has touted security requirement as the "third pillar" that people are demanding.
McAfee, the second largest security software provider after Symantec, will help Intel breach the mobile market, a division which remains untouched by the chip giant, despite its chips running on 80 per cent of PCs around the globe.