Google parent Alphabet in talks to buy cyber firm Wiz for $33 billion

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By Katie Roof, Lynn Doan and Davey Alba 

Alphabet Inc. is in talks to purchase cloud-security company Wiz Inc. for $33 billion, restarting discussions that were called off last summer after extended negotiations, according to people familiar with the matter. 

The deal, which may be announced as soon as Tuesday, would 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. The internet search company’s cloud business has been profitable in recent quarters after years of losing money, though its sales growth has slowed. 

 

Terms of the deal haven’t been finalised and could still change, or discussions could end without agreement. A representative for Wiz declined to comment, and Alphabet didn’t respond to requests for comment.

 

For Wiz, the deal talks represent a reversal after the company turned down Alphabet’s $23 billion offer last July, sticking instead with a plan to remain independent and eventually pursue an initial public offering. Wiz and its investors balked at the purchase in part because of worries of a protracted regulatory approval process, with competition authorities in the US and Europe scrutinizing the technology sector for its economic sway and market power. 

 

Wiz Chief Executive Officer Assaf Rappaport, who described last year’s Alphabet bid as “humbling,” at the time said he relished the idea of growing Wiz into an independent cybersecurity giant, to compete against the likes of CrowdStrike Holdings Inc. and Palo Alto Networks.

 

While US President Donald Trump’s administration is likely to offer a more permissible deal environment, Alphabet’s offer could still draw scrutiny from antitrust regulators. Google has already been fending off several challenges on that front, including the Department of Justice accusing the company of abusing its dominant position in online search. In that case, a federal judge ruled last year that Google maintained an illegal monopoly in search. The company is facing another antitrust case over its digital advertising tools.

 

But Google’s cloud business is No. 3 in the market behind Microsoft and Amazon, which may give it an argument against regulatory concerns about market concentration in the cloud business.

 

Started by Israelis and based in New York, Wiz’s investors include Sequoia Capital, Index Ventures, Insight Partners and Cyberstarts. Last year, the company was valued at $12 billion in a funding round. 

 

The renewed talks were reported earlier by the Wall Street Journal.