Alfabet, the main company of Google, is going to buy a cyber security Israeli company Wiz for $ 12 billion or $ 1,2 billion. This is considered the company's biggest contract. This agreement will strengthen their infrastructure in cyber security and will help compete with Amazon and Microsoft in cloud computing. The news agency Reuters reports this information.
This agreement will include Wiz in the Google Cloud Unit.
The Trump administration has continued to monitor the contracts of big technology companies. However, the high value and proposed separation fees of the agreement indicate that Alfabate thinks the agreement will be monitored and approval of the White House.
Google shares dropped by about 5 percent last Tuesday. Google shares dropped by 5 percent this year, which was the reason for China's low -cost dipsic rise.
Meanwhile, Alfabet proposed $ 20 billion last year. However, Israeli Startup Wiz rejected the proposal. So Google has proposed such a large amount of money to finalize the acquisition.
In a private funding round last May, Wiz's market value was $ 12 billion and its annual repeated revenue was more than $ 1 million in mid -2021. Sources said Google's proposal wiz was rejected last year, but communication between the two parties was maintained. Because Google Cloud CEO Thomas decided to make a deal with Kurian Wiz.
Various sources said the discussion has been accelerated in the last two months, as Donald Trump has returned to the White House. Trump says he will continue to monitor large technology companies, which began during his first administration. Although Wall Street is hoping, there may be some changes in the policy of competition under this president.
Due to the strict antitrust regulatory environment in the United States in 2021, it was difficult for many companies to perform a big deal. However, it is expected that the Trump administration will eliminate some antitrust policies.
Wiz works with various cloud service provider including Wiz Amazon Web Services (AWS), Microsoft Ajur and Google Cloud and its customers include Morgan Stanley, BMW and LVMH Company.
Wiz products will also be available through other major cloud service provider. Alfabet is hoping that the agreement will be completed in 2021. However, it will depend on regulatory approval.
Even if the Google Wiz is acquired, the company will be able to work with other cloud service suppliers (eg Microsoft Intor or Amazon Web Services), which will help deal with the United States regulatory problem. Because the US judiciary and the Federal Trade Commission (FTC) have been trying to impose strict control over the technology sector for quite some time.
Google's cloud unit has earned $ 1 billion in 2021, which has increased faster than the company's search business. DA Davidson Analyst Gill Luria says the high evaluation of the Wiz is based on its wide growth of another year.
He also said, “If Google wants to compete for large enterprise customers with Microsoft Azur, they will have to pay a package of security software and other services.”
If the Wiz wants to cancel the deal, then they will have to pay Google for $ 1.2 billion separation fees, which will be one of the highest divorce fees in history.
Last year, the activities in various industries were disrupted due to global crowdstrack conflict. So companies are interested in securing online domains and spending more to strengthen cyber security.
Another indication of this agreement is that Israel's cyber security industry is much stronger and competitive. Silicon Valley has bought large companies in the Israeli-based or Israeli security company. For example, in 2022, Siempphy bought Alphabet to a cyber security company called Siempphy.
Again, the founders of the Wiz sold their cloud security company Adalm to Microsoft.
References: Reuters
