Google to buy cybersecurity firm Wiz for $32B US in company’s biggest ever deal
Google’s parent company, Alphabet, has concluded an agreement to purchase the Wiz computer security company for $ 32 billion in the United States in what would be the largest acquisition of the technology giant, a move that arrives at the same time that is facing a potential breakdown of its internet empire.
The acquisition proposed announced on Tuesday is part of Google’s aggressive expansion in cloud computing during a boom in artificial intelligence. The frenzy is guiding the data center demand that provide the calculation power for artificial intelligence technology and intensify competition in that space between Google and two other technological powerhouses, Microsoft and Amazon.
If the All-Cash transaction is approved by the regulators, Wiz will join Google Cloud. Most of the annual revenues of the United States of $ 350 billion alphabet still derive from its research and advertising operations, but with the advent of the AI, the Cloud division has become a nascent star in Google.
Annual revenues in the division were $ 26.3 billion in the United States in 2022 and increased by 64 % to $ 43.2 billion in the United States last year.
The offer on Tuesday, which would have decreased as the largest computer security acquisition throughout the sector, easily eclipses the current largest acquisition in the history of 26 years of Google-with the acquisition of $ 12.5 billion in the United States of Motorola Mobility in 2012 which did not pay the way in which the View Mountain, California, the company had hoped.
Wiz, a five -year -old startup founded by four longtime friends who met in the Israeli army when they were still teenagers, this year is on the right road for about $ 1 billion. After starting in Israel in 2020, Wiz now supervises an operation that makes the security tools that protect the information stored in the data centers by its current headquarters in New York.
“Wiz and Google Cloud are both fueled by the belief that the safety of the cloud should be easier, more accessible, more intelligent and democratized, so more organizations can adopt and use cloud and safely,” wrote Assaf RapPaport Assaf RapPaport in a blog post.
In a teleconference on Tuesday, the Google Sundar Pichai CEO has foreseen the addition of Wiz of the Cloud division will lead to even better safety at a lower cost than that it can be provided now. This provision may have been addressed to regulators who could examine the way in which the agreement will affect competition and prices, as was in potential customers.
Google had courted Wiz for some time before settling at a significantly higher price compared to the US offer from $ 23 billion reported that it was rejected last July.
Investors reacted coldly to Tuesday’s news, as they usually do with high price acquisitions, with alphabet actions down by two percent.
Some of Google’s Other Acquisitions Have Turned Into Gold Mines, Most Notably Its $ 1.76-Billion US Purchase of Online Video Pioneer YouTube in 2006 and ITS $ 3.1-Billion US Takeover of Advertising Technology Platform DoubleClick in 2008. A $ 5.4-Billion US Purchase of Another Security Firm, Mandiant, in 2022 Also Helped Fuel the Recent Growth of Google’s Cloud Division, Which posted an operating profit of $ 6.1 Billion Us Last Year.
Google’s DoubleClick agreement is now part of an antitrust case presented by the United States Department of Justice aimed at Google technology for the distribution of ads on the Internet. A sentence in that case, which involves accusations according to which Google has illegally abused its power to manipulate digital ads prices, is expected this year.
Antitrust cases threatening the Google Empire
Regulators in the United States and abroad are also targeting Google on other fronts.
Last year, a federal judge in another case presented by the Department of Justice concluded that Google had transformed its omnipresent search engine into an illegal monopoly. The penalty phase of that experimentation begins next month.
The Wiz agreement will also get a look closely by the antitrust regulators, due to the potential impact on self -employed cyber security suppliers, as well as potential interruptions for larger competitors.
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Antitrust concerns may have contributed to the withdrawal of Wiz from last year’s sales interviews, while then the administration of the President of the United States Joe Biden was trying to block a variety of technological agreements.
Accepting a sale now indicates that both Google and Wiz are more confident that the agreement will get the approval of the United States as part of the Trump Administration, Mergermarket analysts Kevin Ketcham and Kevin McCaffrey wrote Tuesday.
“The two sides probably would not have concluded the agreement if they had not at least seen a potential path for closing,” they said.
But the business dog guard group requires the progress fund fund has urged the Trump administration to block Google’s acquisition attempt.
“It is time to show the public whether they have the courage to intervene and prevent a large fish from being swallowed up by one of the largest fish in the pond,” said Emily Peterson-Cassin, director of the group’s power.
If the companies obtain the regulatory Greenlight and satisfy different conditions, in their agreement, Google and Wiz expect the agreement to end in 2026.
