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Google Nears $23 Billion Deal to Acquire Cybersecurity Firm Wiz: WSJ
By: Barron's | July 14, 2024

Alphabet GOOGL -0.27%’s Google is nearing a $23 billion deal for the cybersecurity firm Wiz in what could be the search giant’s largest acquisition ever, The Wall Street Journal reported.

A deal could come together “soon,” the report said, citing people familiar with the talks. Representatives for Alphabet and the Wiz didn’t immediately respond to a request for comment from Barron’s.

The acquisition would come amid heightened scrutiny in Washington of competition in the technology industry.

Wiz would add to Alphabet’s efforts in cloud computing. In May, the start-up said it raised $1 billion at a valuation of $12 billion in a funding round led by Andreessen Horowitz, Lightspeed Venture Partners, and Thrive Capital.

Wiz CEO Assaf Rappaport said then that “2024 is the year of consolidation—for Wiz, and the industry at large.” Money from the funding raise would be used in part for acquisitions, the company said in May. Wiz recently acquired Gem Security, a cloud detection and response firm.

Wedbush analyst Dan Ives told Barron’s in an email that a deal would be a smart strategic move for Google, “and a shot across the bow against Microsoft MSFT -0.25% and Amazon AMZN -0.29%.”

Google has been trying to catch up in the cloud computing space with Amazon and Microsoft. Two years ago, Google bought another security firm Mandiant for $5.4 billion.

But the company also faces antitrust scrutiny from regulators, especially in its search business. It is awaiting the outcome of a Justice Department lawsuit over the methods it used to boost its internet search business, and it also faces claims of unfair practices in its ad-tech business.

While the Biden administration’s Federal Trade Commission has been forcefully going after anticompetitive practices in the tech industry, a change of administration to a Republican president could shift things, Ives said.

Should former President Donald Trump win the election in the fall and return to the White House, “we would expect a very weak FTC and tech deals to accelerate,” Ives said.

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