Alphabet acquires cloud security company Wiz for $33 billion in competition between Microsoft and Amazon
(Bloomberg) – Alphabet Inc. is in talks with a purchase of Cloud-Security Company Wiz Inc. for $33 billion and restarts discussions that were canceled last summer after the extension of negotiations, according to people familiar with the matter.
The deal could be announced immediately Tuesday, which will be Alphabet’s largest acquisition to date and could help Alphabet’s Google catch up with Microsoft Corp. and Amazon.com Inc. in the competitive cloud computing market. After years of losses, Internet search companies’ cloud business has slowed sales growth in recent years, but has been profitable in recent years.
The terms of the transaction are not yet completed and can still be changed, or the discussion may end without an agreement. Wiz’s representative declined to comment, and Alphabet did not respond to a request for comment.
For Wiz, the deal negotiations represent a reversal after the company rejected Alphabet’s $23 billion offer last July, instead insisting on keeping its independent plan and ultimately seeking an IPO. Wiz and its investors were acquired in the purchase, partly due to concerns about the lasting regulatory approval process, and competition sectors in the United States and Europe have reviewed the economic impact and market power of the technology sector.
Wiz CEO Assaf Rappaport described last year’s letter bid as “humble” when he said he was happy to develop Wiz into an independent cybersecurity giant to compete with CrowdStrike Holdings Inc. and Palo Alto Networks.
While the administration of U.S. President Donald Trump may provide a more permissible trading environment, the letter proposal may still be scrutinized against antitrust regulators. Google has already addressed some challenges in this regard, including the Justice Department accusing the company of abuse of its dominance in online searches.
In this case, a federal judge ruled last year that Google maintained an illegal monopoly in the search. The company faces another antitrust case on its digital advertising tools.
But Google’s cloud business ranks third in the market behind Microsoft and Amazon, which could make it opposed regulatory issues regarding the centralized market for cloud services.
Wiz’s investors are founded by Israelis and are headquartered in New York, including Sequoia Capital, Index Ventures, Insight Partners and Cyberstarts. Last year, the company was worth $12 billion in a round of financing.
