Alphabet Inc.'s Google said on Tuesday it would buy cybersecurity firm Mandiant Inc. for $5.4 billion in cash as its cloud business skyrockets.

Google's offer of $23 per share is at a premium of about 53% to Mandiant's stock price before a report that said Microsoft Corp. was eyeing a deal to buy the company.

A deal could bolster Google's cloud computing business, which generates more than $19 billion annually but has been losing billions of dollars a year, and help it compete with bigger rival Microsoft Corp.

Mandiant focuses on cyber-incident response and cybersecurity testing.