Intel surprises Wall Street with $7.7bn purchase of McAfee

Intel, the world's largest maker of microchips, is paying $7.7bn for the software company McAfee, in a deal analysts described as "weird", "out of left field" and "not the combination investors were expecting to wake up to".

But if the immediate reaction to the acquisition was one of surprise, Intel insisted that it would usher in a new era where security against hackers and computer viruses was built into the very hardware at the heart of the tech industry.

McAfee, famous for software that scans for viruses and installs firewalls on personal computers, agreed to sell to Intel at a 60 per cent premium to the prevailing share price. The pair have been collaborating for 18 months on new products that will embed McAfee security software within Intel's new technology for smartphones and other internet-enabled devices, from televisions to ATMs.