(Reuters) -Palo Alto Networks (PANW) will buy Israeli peer CyberArk (CYBR) Software for about $25 billion, in its biggest deal yet, as CEO Nikesh Arora seeks to create a comprehensive cybersecurity provider to tap into rising AI-driven demand.
Wednesday’s cash-and-stock deal, one of the largest tech takeovers this year, underscores a consolidation in the industry as customers streamline vendors after facing breaches while relying on a patchwork of firms.
It follows Alphabet’s (GOOG) $32 billion acquisition of Israeli startup Wiz in March, and will broaden Palo Alto’s cybersecurity offerings by adding identity security tools, bolstering its appeal to large enterprise customers.
CyberArk investors will receive $45.00 in cash and 2.2005 shares of Palo Alto for each share they own, the companies said. The acquisition is expected to close in fiscal 2026 and will immediately add to Palo Alto’s revenue growth, as well as gross margin.
Palo Alto shares fell 6.6% before the bell, while CyberArk slid 1.3% after jumping 13.5% in the previous session on news of the deal. CyberArk stock is up around 30% so far this year.
“The rise of AI and the explosion of machine identities have made it clear that the future of security must be built on the vision that every identity requires the right level of privilege controls,” Arora said in a statement.
CyberArk specializes in privileged access management, technology that helps organizations safeguard sensitive systems by limiting and monitoring access to critical accounts. Its customers include Carnival Corp, Panasonic and Aflac.
A surge in cyberattacks, including data breaches and ransomware, has driven demand for more comprehensive defenses. That has fueled interest in firms including CyberArk.
The deal also comes as Palo Alto looks to accelerate its AI security push, with analysts at Scotiabank saying that it could use its large salesforce to drive adoption of CyberArk’s tools -seen as critical for securing emerging agentic AI systems.
(Reporting by Kritika Lamba and Aditya Soni in Bengaluru; Editing by Sriraj Kalluvila)
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