Security software firm Avast is to buy rival AVG in a $1.3 billion (€1.17billion) deal.

The Czech-founded company, which provides free and paid-for antvirus and security software to businesses and consumers, said it would buy AVG in a bid to grow its business ahead of new opportunities in emerging markets.

"We are in a rapidly changing industry, and this acquisition gives us the breadth and technological depth to be the security provider of choice for our current and future customers," said Vince Steckler, chief executive of Avast. "Combining the strengths of two great tech companies, both founded in the Czech Republic and with a common culture and mission, will put us in a great position to take advantage of the new opportunities ahead, such as security for the enormous growth in IoT."

Avast is set to pay $25 per share for the company, an all-cash offer that is a 33 per cent premium to yesterday’s closing price and is being backed by the AVG board.

"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," said Gary Kovacs, chief executive of AVG. "Our new scale will allow us to accelerate investments in growing markets and continue to focus on providing comprehensive and simple-to-use solutions for consumers and businesses alike. As the definition of online security continues to shift from being device-centric, to being concerned with devices, data and people, we believe the combined company, with the strengthened value proposition, will emerge as a leader in this growing market."

Avast has more than 230 million users worldwide; if shareholders approve the deal it will increase that user base to 400 million.