The transaction, which was unanimously approved by Avast's management and supervisory boards, will see the software vendor claiming all outstanding shares of AVG for $25 per share in cash.
The deal was largely funded by a financing commitment from Credit Suisse Securities, Jeffries and UBS Investment Bank for a total of $1.685bn, with Avast contributing $150m in equity investment.
According to Avast's CEO Vince Steckler, he approached AVG with the offer several weeks ago. The CEO said AVG will keep its branding "for quite a while, if not forever" following the acquisition.
"We both have strong brands that work for different people in different areas. The two companies together have very strong established brands so we are not looking to merge them together," he said.
"We both have a good consumer business; our consumer business is stronger than AVG's, but AVG has a good consumer business in the English-speaking market, while we have a strong consumer business outside the English-speaking countries. We both have a traditional mobile business, theirs is significantly larger than ours, and they have an anti-virus product that is a really neat technology."