Google has successfully acquired Israeli cybersecurity startup Wiz for $32 billion, marking one of the largest tech deals in history. The agreement comes less than a year after an earlier $23 billion bid collapsed due to regulatory concerns.
Key Drivers of the Deal
- Higher Offer & Breakup Fee
- Google increased its bid by 39%, from $23 billion to $32 billion.
- The deal includes an unusually high breakup fee of $3.2 billion (over 10% of the deal value), protecting Wiz if the acquisition fails.
- Trump Administration’s Impact on Antitrust Review
- The deal gained momentum after Trump’s inauguration (Jan. 20, 2025).
- Trump’s appointment of Andrew Ferguson as FTC Chair and Gail Slater to oversee DOJ antitrust reviews reassured Google and Wiz about a friendlier regulatory environment.
- Strong Growth Metrics
- Wiz is experiencing 70% annual revenue growth.
- The company has reached over $700 million in annualized revenue.
- Key Executives Leading the Deal
- Fazal Merchant joined Wiz as CFO in January, playing a critical role in structuring the deal.
- Google Cloud CEO Thomas Kurian was a key negotiator from Google’s side.
- Goldman Sachs advised Wiz, while Bank of America advised Google.
Regulatory Considerations
- Google is already facing two DOJ lawsuits related to online search dominance and ad technology.
- Wiz’s investors were concerned about potential FTC opposition, especially after the Adobe-Figma deal collapsed due to antitrust scrutiny in 2023.
- It’s unclear if Google and Wiz consulted U.S. antitrust authorities before finalizing the agreement.
Industry Impact
- Breakup fees in tech M&A deals typically range between 4% and 7%—Google’s 10%+ fee is an outlier.
- The acquisition strengthens Google Cloud’s cybersecurity offerings, potentially positioning it against Microsoft’s growing security business.
- Wiz had considered an IPO before agreeing to Google’s offer, indicating strong investor confidence in its growth.
What’s Next?
- Regulatory approval is still pending, but Google is optimistic about a smooth review process under Trump’s administration.
- If successful, this acquisition solidifies Google’s dominance in cloud security and could reshape the cybersecurity landscape.
Would you like insights into how Google’s cybersecurity strategy compares to competitors like Microsoft and Palo Alto Networks? 🚀
