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US: Alphabet to buy Wiz for $32bn in its biggest deal to boost cloud security

  • 19.03.2025 00:41
  • msn.com
  • Keywords: dangerous, success

Alphabet announced plans to acquire cybersecurity startup Wiz for $32 billion, its largest deal ever, to strengthen Google Cloud's position in cloud security amid competition with Amazon and Microsoft. The acquisition aims to enhance Alphabet's cybersecurity offerings while addressing regulatory scrutiny concerns.

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Estimated market influence

Alphabet

Alphabet

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Analyst rating: Buy

Alphabet is acquiring Wiz to boost its cloud security.

Wiz

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Analyst rating: N/A

Wiz is being acquired by Alphabet, which may impact its independence.

Context

Analysis: Alphabet's $32 Billion Acquisition of Wiz

Key Facts

  • Acquisition Price: Alphabet agreed to buy Wiz for $32 billion, marking its largest deal in history.
  • Target Company: Wiz, an Israeli cybersecurity startup, focuses on cloud security and has clients like Morgan Stanley, BMW, and LVMH.
  • Timeframe: The deal is expected to close by 2026, pending regulatory approval.
  • Alphabet's Motivation: Strengthen Google Cloud’s position in the competitive cloud computing market against Amazon and Microsoft.
  • Wiz Valuation: Wiz was valued at $12 billion in May 2024 with annual recurring revenue exceeding $500 million.
  • Share Impact: Alphabet shares dipped nearly 3% post-announcement, down 13% year-to-date due to concerns over AI spending and market pullback.

Market Trends

  • Cloud Security Growth: The acquisition highlights the growing importance of cybersecurity in cloud computing, a sector projected to expand significantly.
  • Big Tech M&A Scrutiny: Alphabet’s deal comes under potential antitrust review, with Trump-era policies still influencing regulatory scrutiny.

Competitive Landscape

  • Google vs. Amazon/MSFT: Alphabet aims to compete more effectively with Amazon Web Services and Microsoft Azure by enhancing its cybersecurity offerings.
  • Wiz's Neutral Position: Wiz will remain accessible across all major cloud platforms post-acquisition, maintaining its neutrality in the market.

Strategic Considerations

  • Enhanced Offerings: Integrating Wiz into Google Cloud will bolster Alphabet’s ability to protect businesses from critical risks.
  • Regulatory Risk Management: The high breakup fee suggests confidence in navigating antitrust reviews despite potential White House scrutiny.

Long-Term Implications

  • Investor Sentiment: Alphabet’s track record in M&A, particularly under CEO Sundar Pichai, will be closely monitored by investors.
  • Industry Impact: The deal may prompt other tech giants to increase investments in cybersecurity to maintain competitive edge.

Financial Impact

  • Share Performance: Alphabet shares dropped 3% post-announcement, reflecting investor concerns over the acquisition’s potential dilution of shareholder value.
  • Market Sentiment: The move underscores broader challenges in tech, including competition and regulatory risks, which have weighed on stock performance this year.