News of Alphabet’s Wiz acquisition has set the tech world alight with curiosity. This deal marks a big step forward in leading Google’s grasp over cybersecurity and cloud computing, especially when you account for the fact that the final bid is much higher than what was under negotiation in the early days.
The Alphabet-Wiz deal was previously in the $23 billion range when the company initially offered to make the purchase, but multiple concerns around Google’s business and the antitrust legislation had taken attention away from the negotiations. Now that Alphabet has its hands relatively free again, the company has grabbed at the change to complete negotiations with the Israeli firm. The Alphabet Wiz purchase is now tagged at an all-cash deal of $32 billion.
Image: Alphabet’s plans to acquire Wiz are unsurprising as the cloud security business has expanded exponentially in the brief time since it was established.
Alphabet’s Wiz Acquisition Announced with $32 Billion Deal
Google parent company Alphabet is drawing close to acquiring the cybersecurity firm Wiz as we speak, but both parties have not released a statement on how the deal is proceeding and what restrictions there are—if any. When the Alphabet-Wiz takeover was first considered back in July last year, the cybersecurity firm was believed to have rejected the deal.
Apart from the antitrust concerns that were prevalent at the time, Wiz also said no to Google as it was considering pursuing an Initial Public Offering (IPO) plan. According to Pymnts, the firm had been valued at around $12 billion, after it had managed to raise $1 billion in a May funding round, which it was planning to channel into product development and other upgrades to the business. The Israeli-founded unicorn Wiz has been one of the fastest-growing cybersecurity firms and software companies we’ve seen in a while.
Not only has Wiz found success as a cybersecurity specialist, but the business also has its roots in the cloud computing and artificial intelligence businesses, all of which are fast-growing fields right now. Each wing is in a position to benefit Alphabet, and Google by extension.
The Alphabet Wiz acquisition plan still sounds like it could meet some opposition considering the scale of the deal and how it would push Google’s dominance even further, but as of now, the deal appears to be going through.
What are the Terms of the Alphabet and Wiz Deal?
The Alphabet-Wiz takeover will include an all-cash transaction of $32 billion and once it is complete, Wiz will join the Google Cloud business. Google has explained that there are two primary reasons behind the acquisition—improved cloud security and the ability to use multiple clouds (multi-cloud).
The Financial Times reported that an additional retention bonus could be offered to employees as part of the deal, and a break-up fee is also on the table, which Google will have to pay if the deal is blocked by antitrust regulators.
Despite Alphabet’s Wiz acquisition, other clients will not have to worry about losing access to Wiz as its products will be available across cloud platforms like AWS, Microsoft Azure, etc., and will be offered to customers via partner security solutions in the Google Cloud Marketplace.
What Does Alphabet Get for Purchasing Wiz?
Google published a blog to explain why it believes Alphabet’s acquisition of Wiz will be beneficial for the company and its customers, and the reasoning primarily revolves around cybersecurity.
“Organizations of all sizes — from start-ups and large enterprises to governments and public sector organizations — can use Wiz to protect everything they build and run in the cloud.”
While Google has already explored and established its cloud infrastructure to a large degree, Alphabet’s takeover of Wiz will allow it to make improvements to its security offerings, both in scale and quality. Its cybersecurity teams will benefit from the automated platforms and its customers will see lowered costs for implementation and management.
Google also explained that by acquiring Wiz, it will be able to better prepare itself for fighting against new threats that are arising due to AI—an area where its own offerings are a part of the problem. The deal will also boost the adoption of multi-cloud security services, which will open up new doors for the company and the customer.
Will Alphabet’s Wiz Purchase Be Subject to Regulation?
Alphabet’s acquisition of Wiz will still be subject to regulatory approvals before it can be closed. Under the new president, the regulations could be considerably more lenient for the tech giant, so the deal could go through unopposed. Some put the timeline for closing the deal in 2026, which means that there could be changes to the deal in the meantime. Not only does the Alphabet and Wiz deal mark the largest acquisition this year, the $32 billion takeover is also the biggest acquisition in the tech company’s history. It is also possibly the biggest deal in the history of cybersecurity.
The scale of the deal shows just how convinced Google is about the benefits of expanding its cloud and cybersecurity services, and how much the company is willing to invest to make it happen. As per Reuters, the company had only $23.47 billion in cash and cash equivalents as of December 31, 2024, so it might seek external financing to close the deal. That’s not to say that this is all the money Google has, but a large amount of its funds are tied up with other projects that will remain ongoing. Still, Alphabet’s Wiz takeover bid remains a priority.
The announcement of the acquisition has not had an uplifting effect on company shares, which were down nearly 3% in early trading amid broader market weakness. The market has been pointedly unstable over the last few weeks, whether you consider Apple, Tesla, or Amazon stocks, but it is expected to recover and has started to do so to a degree.
Do you think the Alphabet Wiz acquisition plan will face any regulatory restrictions? Should it? Let us know. For more insights into the world of technology, subscribe to Technowize. We’ll keep you informed.