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.
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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.