Palo Alto Networks, a global cybersecurity leader, announced its agreement to acquire CyberArk, an Israeli identity security firm, in a landmark deal valued at approximately $25 billion. This marks Palo Alto’s largest acquisition to date as CEO Nikesh Arora aims to create an all-encompassing cybersecurity platform amid rising AI-driven threats.
This strategic acquisition is poised to reshape the cybersecurity sector by establishing Identity Security as a foundational element of Palo Alto Networks’ multi-platform approach. With this move, Palo Alto Networks makes a significant entry into the Identity Security market, aiming to integrate CyberArk’s acclaimed Privileged Access Management (PAM) capabilities with its own AI-powered security platforms. The combination will deliver comprehensive identity protection for all user types—including humans, machines, and the emerging class of autonomous AI agents.
Deal Highlights and Strategic Impact
The acquisition — one of the biggest tech deals of 2025 — reflects growing consolidation in the cybersecurity sector. Many customers, facing increasingly complex attacks and fragmented defense systems, are seeking to simplify their vendor landscape.
The move follows Alphabet’s $32 billion purchase of Israeli startup Wiz in March and will significantly expand Palo Alto’s portfolio by adding CyberArk’s identity and privileged access management tools, which are crucial for large enterprises.
Under the terms of the agreement, CyberArk shareholders will receive $45.00 in cash and 2.2005 shares of Palo Alto Networks common stock per share, representing a 26% premium over CyberArk’s recent average stock price.
Nikesh Arora, Chairman and CEO of Palo Alto Networks, described the acquisition as a timely move:
“We enter markets at moments of critical transformation, and for Identity Security, that time is now,” said Arora. He emphasized the growing importance of securing both human and machine identities in the age of AI. “CyberArk’s industry-leading technology is vital to safeguarding the future digital workforce.”
The acquisition will accelerate Palo Alto Networks’ platform evolution by embedding CyberArk’s identity security tools into its Strata™ and Cortex offerings. This will provide a unified, security-first solution designed to reduce risk, close identity-related security gaps, and streamline operations for customers.
AI and the New Privileged Workforce
Rising cyber threats, including data breaches and ransomware, have increased demand for comprehensive security solutions. Interest in identity protection surged earlier this month when Microsoft revealed that over 100 organizations, including U.S. government agencies, were targeted through hacked SharePoint servers.
“The rise of AI and explosion of machine identities show that security must be rooted in proper privilege controls,” said Arora in a statement.
CyberArk, known for its expertise in privileged access management, counts Carnival Corp, Panasonic, and Aflac among its clients.
A major focus of the combined company will be securing autonomous AI agents, which are becoming critical components of modern enterprises. These agents, viewed as privileged users, require advanced identity protection based on just-in-time access and least privilege principles—areas where CyberArk excels.
Market Reaction and Integration Concerns
Following the announcement, Palo Alto shares fell 8%, while CyberArk dropped 2.2% to around $424 after surging 13.5% the previous day amid deal rumors.
Analysts pointed to concerns over integration, given the size of the deal. Palo Alto has typically focused on smaller acquisitions under $1 billion.
Since 2019, Palo Alto has made over 14 acquisitions — including at least seven in the past two years — to enhance its cloud and AI security capabilities.
CyberArk posted 2024 revenue of roughly $1 billion, a 33% increase from the prior year. However, its net loss widened by $27 million to $93.5 million due to higher spending.
Shared Vision and Future Outlook
CyberArk’s Founder and Executive Chairman, Udi Mokady, hailed the merger as a defining step forward.
“This is a profound moment in our journey,” Mokady said. “Our shared mission with Palo Alto Networks is to tackle the most complex identity challenges. Together, we will set a new standard for securing identities—whether human or machine—in an AI-driven world.”
The boards of both companies have unanimously approved the transaction. It is expected to close in the second half of Palo Alto Networks’ fiscal year 2026, pending regulatory approvals and approval from CyberArk’s shareholders.
Analysts believe the deal could accelerate Palo Alto’s expansion into identity security, an area where it previously lacked offerings, and bolster its AI security ambitions.
Cybersecurity spending is projected to grow 12.2% in 2025 as organizations strengthen defenses against AI-powered threats.
The deal is expected to close in the second half of Palo Alto’s fiscal year 2026 and should immediately boost both revenue growth and profit margins. Analysts do not foresee significant antitrust obstacles due to the minimal overlap between the two companies.
Despite the wave of consolidation, some Israeli cybersecurity firms are holding out. Check Point Software Technologies stated earlier it has no plans to be acquired, distancing itself from recent M&A activity in the region.
