Google is now in discussions to acquire Mandiant Inc., a cybersecurity company that was previously approached by Microsoft. According to a report from The Information, Google is willing to spend billions on the US-based firm to improve the security aspects of its cloud computing offerings.

In a separate report, Bloomberg revealed that two people familiar with the deliberations said that Microsoft has dropped out of the race to acquire Mandiant more than a week ago. “Microsoft ended its takeover discussions on concerns that Mandiant’s collection of security businesses wasn’t a good enough strategic fit, according to one of the people,” Bloomberg wrote.

Microsoft has already made multiple investments to bolster its cybersecurity capabilities. Last year, the Redmond giant acquired cybersecurity companies RiskIQ, ReFirm Labs, and Cloudknox, and the company has already started to integrate the latter into its technology stack.

Google is in a different situation with its cloud computing business, which has yet to break even despite generating over $19 billion of revenue annually. Anyway, the new reports have already boosted Mandiant’s stock to $22.49 yesterday, with the company’s market capitalization reaching $5.26 billion. This would make Mandiant Google’s second-biggest acquisition after Motorola Mobility ($12.5 billion) ten years ago.

Update: It’s official, Mandiant has just announced that it has entered into a definitive agreement to be acquired by Google in an all-cash $5.4 billion deal. “Together with Mandiant, Google Cloud will deliver an end-to-end security operations suite with even greater capabilities as well as advisory services helping customers address critical security challenges and stay protected at every stage of the security lifecycle,” the company said.

Tagged with Google, Microsoft, Security