Palo Alto Networks will take over Israeli identity security provider CyberArk in a deal valued at roughly $25 billion.
The California-based cybersecurity company will pay shareholders $45 apiece for 2.2005 shares of CyberArk, representing a 26% premium to its share price Friday. The deal is expected to close during Palo Alto Networks' fiscal year 2026.
Shares of Palo Alto fell 7% Wednesday, building on a 5% loss from Tuesday. CyberArk's stock dipped about 1%.
Palo Alto CEO and chairman Nikesh Arora said in an interview with CNBC's "Squawk on the Street" on Wednesday that the company is entering the identity market as it hits an inflection point, which has always been its strategy.
"They are poised to go and disrupt this market and create the platform we need and also solve the upcoming problem with agentic AI," he 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."
Blockbuster cybersecurity deals have been a force in the mergers and acquisitions market in 2025 after a relatively slow period for dealmaking. In March, Google shelled out $32 billion for cloud security startup Wiz in its biggest acquisition ever.