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Google’s Strategic Move to Acquire Wiz for $3.2 Billion

Despite a challenging regulatory environment in 2024, Wall Street remains hopeful that changes in antitrust policies under US President Donald Trump may revitalize the landscape for mergers and acquisitions. According to a recent report by Reuters, Google has reportedly reached an agreement to acquire cybersecurity startup Wiz, accompanied by a substantial breakup fee of $3.2 billion, which will be paid to Wiz if the agreement falls through.

A Financial Times article highlights that this breakup fee is notably high, constituting 10 percent of the deal’s total value—much larger than the customary 2 to 3 percent seen in similar agreements. This substantial fee reflects the ongoing caution that tech companies have towards potential antitrust scrutiny, which persists even with a favorable political climate under the current administration and the leadership of the new chair of the Federal Trade Commission, Andrew Ferguson.

Wiz’s co-founder and CEO, Assaf Rappaport, expressed that while Wiz is set to integrate within Google Cloud, both parties are committed to maintaining Wiz as a multicloud platform. Rappaport emphasized the importance of ongoing collaborations with key industry partners, including AWS, Azure, and Oracle, in a recent blog post.

Thomas Kurian, CEO of Google Cloud, stated that the acquisition of Wiz is aimed at enhancing Google’s security offerings. In a blog entry, Kurian outlined that while Google’s existing products assist customers in detecting threats through software-as-a-service (SaaS) tools and consulting services, Wiz provides a distinct advantage by offering connectivity to multiple cloud environments, thereby preventing security incidents before they arise.

According to Kurian, Wiz offers a solution that thoroughly scans customer environments, creating a detailed representation of their code, cloud assets, services, and applications, along with their interconnections. This tool is designed to identify potential vulnerabilities, prioritize risks based on their severity, and empower developers to secure their applications before they go live. Furthermore, it facilitates collaboration between security teams and developers to address risks in code and thwart ongoing threats.

Source
arstechnica.com