Google Is Close To Making Its Biggest Acquisition Ever

Alphabet, Google’s parent company, is in advanced talks to buy fast-growing cybersecurity startup Wiz for around $23 billion, a person familiar with the situation confirmed to CNN.

A takeover of Wiz, which provides cybersecurity software for cloud computing, would be Google’s largest cybersecurity acquisition to date.

According to the source, the talks between Google and Wiz began after the business raised $1 billion from venture capital investors earlier this year.

Google | CNN

Google Is Close To Making Its Biggest Acquisition Ever

According to the source, the terms of a potential deal have not been completed, and negotiations may fail.

The Wall Street Journal was the first to report on the Wiz talks.

Neither Google nor Wiz responded to CNN’s requests for comment.

The transaction would likely beat Google’s $12.5 billion acquisition of Motorola almost a decade ago, the company’s largest buyout in history. Only two years later, Google sold Motorola for a huge loss.

Wiz’s $23 billion price tag roughly quadruples the startup’s $12 billion valuation from its most recent fundraising round.

In March 2022, Alphabet paid $5.4 billion to acquire cybersecurity firm Mandiant as part of its attempts to help businesses better confront cyber risks and grow its cloud computing business.

Cloud is critical to the company’s efforts to diversify revenue streams beyond its main search advertising business. Despite increased cloud revenues, it has yet to compete with similar services like Microsoft and Amazon.

Buying Wiz would be a “shot across the bow” at Microsoft and Amazon, demonstrating Google’s “major bet on the cyber security space to complement its flagship offering in the cloud,” Dan Ives, managing director and senior equity research analyst at Wedbush, wrote in a note to clients on Monday.

Cloud security has grown increasingly critical recently as businesses have extensively moved data to cloud systems. Last week, AT&T disclosed that virtually all of its wireless customers’ call and text records were compromised in a huge breach caused by an “illegal download” on a third-party cloud platform.

The Wiz acquisition talks came despite intensified antitrust investigation of internet titans by the Biden administration.

However, if Trump retakes the White House, that antitrust vigilance might be turned back slightly, Ives said, making the Federal Trade Commission “much weaker” and sparking an “accelerated merger and acquisition environment to take place for Big Tech.”

Google | Wiki Image

Google Is Close To Making Its Biggest Acquisition Ever

If the acquisition is confirmed and completed, it will be a big departure for Wiz and its founders, Assaf Rappaport, Ami Luttwak, Yinon Costica, and Roy Reznik. The four executives first met when enlisted into Unit 8200, the Israel Defense Forces’ cyber intelligence branch.

In New York City, Wiz has experienced rapid development since its inception in March 2020, during the Covid-19 pandemic. Today, the organization claims that 40% of Fortune 100 corporations are its clientele.

Notable customers include BMW, Slack, and Salesforce, and it collaborates with major cloud providers such as Amazon, Microsoft, and Google.

SOURCE | CNN