Palo Alto Networks is set to acquire Israeli identity security firm CyberArk in a landmark deal valued at approximately $25 billion, signaling a strategic shift by the California-based cybersecurity giant to deepen its footprint in the fast-evolving identity protection space.

The move also underscores the heightened pace of consolidation in the cybersecurity industry, as companies scramble to fortify AI-era defenses.

The deal, expected to close during Palo Alto Networks’ fiscal year 2026, will see shareholders of CyberArk receive $45 per share, or 2.2005 shares of Palo Alto stock per CyberArk share. The offer represents a 26% premium over CyberArk’s closing share price on Friday. News of the acquisition, first hinted at in a Wall Street Journal report that sent CyberArk shares soaring 13%, now marks the latest megadeal in the red-hot cybersecurity M&A space.

Shares of Palo Alto Networks, however, took a hit, falling 7% on Wednesday after dropping 5% a day earlier, as investors digested the scale of the transaction. CyberArk’s stock, meanwhile, dipped slightly by 1%, following its initial rally earlier in the week.

Palo Alto Networks Chairman and CEO Nikesh Arora described the deal as both timely and essential, noting in an interview with CNBC’s Squawk on the Street that identity protection has reached an inflection point amid the rise of agentic AI systems.

“They are poised to go and disrupt this market and create the platform we need and also solve the upcoming problem with agentic AI,” Arora said. “From all those factors, we believe this is the right time to do something like this and be ready for the market in the next 12 to 18 months.”

Founded more than a decade ago and publicly listed since 2014, CyberArk is a pioneer in identity security—a branch of cybersecurity focused on protecting access credentials and privileges across cloud platforms, enterprise applications, and sensitive IT systems. Its software tools are critical to ensuring that only authorized personnel can access key infrastructure, a function made even more vital in an age where generative AI systems are rapidly being embedded into corporate networks. CyberArk competes with the likes of Okta and Microsoft in this sector.

With the acquisition, Palo Alto Networks aims to integrate identity security into its existing suite of cybersecurity solutions, a strategic leap that positions the company to offer comprehensive, AI-ready protection to clients. Arora believes Palo Alto’s global scale and enterprise reach will supercharge CyberArk’s platform, expanding its market presence far beyond its current capabilities.

This isn’t the first bold move by Palo Alto in the AI-driven cybersecurity race. In 2023, the company acquired Israeli startups Talon Cyber Security, Dig Security, and Zycada Networks, followed by the 2024 purchase of Protect AI to reinforce its AI toolkits. These acquisitions have helped Palo Alto build a powerful platform that addresses threats across cloud, data, and endpoint security domains, now intersecting more than ever with identity and access control.

Google’s $32 billion acquisition of cloud security startup Wiz in March—its biggest purchase to date—also sent shockwaves through the sector, emphasizing how big tech and cybersecurity players alike are pouring resources into shoring up digital defenses amid growing geopolitical and corporate threats.

Since taking over Palo Alto in 2018, Arora has aggressively expanded the company’s capabilities and grown its market value to around $120 billion. He says the CyberArk acquisition won’t be the last.

“I expect consolidation in the cybersecurity space to continue over the next five years,” Arora told CNBC. “Our job is to get this done, execute, deliver to the market and show our shareholders that we have the ability to execute these kinds of transactions, which I firmly believe we do.”

The integration of identity security into broader defense frameworks is no longer optional—it’s essential as businesses brace for more sophisticated AI-driven attacks and stricter compliance demands. With this acquisition, Palo Alto is making a $25 billion bet that it can lead the charge.

President Donald Trump announced Wednesday that India will face a 25% tariff on its exports to the United States starting August 1, along with an unspecified penalty over what he described as decades of unfair trade practices and its deepening ties with Russia.

The move marks another escalation in Trump’s sweeping tariff regime and could strain relations with one of Washington’s most strategic Asian partners.

The 25% tariff rate comes just weeks after Trump imposed a 26% levy on India during what he branded “Liberation Day.” While the latest figure is just one percent lower, it effectively revives the threat under a different banner.

“India will therefore be paying a tariff of 25%, plus a penalty for the above, starting on August first,” Trump wrote on Truth Social, insisting the measures are a response to both India’s protectionist policies and its purchase of Russian oil and military equipment.

“Remember, while India is our friend, we have, over the years, done relatively little business with them because their tariffs are far too high, among the highest in the world, and they have the most strenuous and obnoxious non-monetary trade barriers of any country,” Trump said, reiterating long-standing complaints about India’s import regime.

While India appeared to have dodged the 26% tariff earlier this year following high-level discussions and backchannel diplomacy, Trump’s latest move effectively brings that threat back to life, raising questions about the durability of any reprieve. Analysts say India now finds itself boxed in, facing growing pressure over its geopolitical balancing act and trade posture.

It’s not clear how India will handle the situation, especially as it continues to rely heavily on discounted Russian crude and legacy Russian military hardware amid its broader strategic autonomy doctrine.

The additional penalty Trump mentioned remains undefined, though observers speculate it could take the form of targeted duties on specific sectors, or even financial restrictions aimed at curbing energy trade with Moscow. Earlier this month, Trump threatened to impose secondary tariffs of up to 100% on countries buying Russian oil unless a ceasefire is reached in Ukraine—an unprecedented escalation that would hit major energy importers like India and China.

“India is Russia’s largest buyer of energy, along with China,” Trump added. “All things not good!”

The announcement also came with a warning about the United States’ trade deficit with India, which Trump described as “massive.” He has frequently justified his unilateral tariffs as necessary to reduce the deficit and protect American industry, despite broad skepticism from economists. Many of them have argued that higher tariffs ultimately raise costs for U.S. consumers, while failing to bring back low-skilled manufacturing jobs that have long since migrated to cheaper labor markets.

“Exporters won’t lower prices to offset tariffs. If Americans want to keep buying their products, they will have to pay the tariffs. If they don’t want to pay higher prices, exporters will just sell their products to consumers outside the U.S. who do not have to pay the tariffs,” Peter Schiff, chief economist at Euro Pacific, noted.

Earlier in the year, Trump declared America’s global trade deficit a national emergency, a move that gave him expanded legal authority to impose tariffs without congressional approval. It also signals how trade may continue to be a central pillar of Trump’s policy platform heading into the 2026 midterms, especially as he doubles down on economic nationalism.

India has not formally responded to the tariff decision, though New Delhi is likely weighing its options as it tries to preserve trade ties with Washington while continuing its pragmatic energy and defense partnerships with Russia. However, with no sign of Trump softening his tone, and the penalty still looming, the pressure on Prime Minister Narendra Modi’s government is likely to intensify in the coming weeks.