Intel to buy Macafee for £5bn

US CHIP maker Intel has announced it is to buy security software firm Macafee in a $7.7 billion (£5bn) deal that will allow the company to expand into a wider array of internet-connected devices.

Under the terms of the deal, Intel will pay 31 per share for Macafee, almost 60 per cent above its closing price on Wednesday.

The takeover will help Intel improve the security of its chips by sharpening the software that goes into them.

It will also open a new revenue stream for Intel, which will sell security software alongside new chips it is developing for devices such as mobile phones, televisions and even cars.

The companies, both based in Santa Clara, California, have reportedly been in discussions for around 18 months.