Google has finalized a $32 billion deal to acquire Israeli cybersecurity company Wiz, marking one of the largest tech acquisitions to date.
The agreement came after months of negotiations and a significant revision of Google’s initial $23 billion offer in July. Sources say the deal gained momentum following Donald Trump’s inauguration, as the new administration promised a more favorable antitrust environment.
To secure the acquisition, Google raised the reverse breakup fee to over $3.2 billion, significantly higher than the typical four to seven percent seen in major U.S. deals.
This fee would be payable to Wiz if regulatory hurdles caused the deal to collapse. The increased offer and higher breakup fee ultimately convinced Wiz executives to accept the deal, despite initial hesitation due to antitrust concerns.
Wiz had been considering an initial public offering (IPO) and appointed Fazal Merchant as CFO in January to evaluate its options. Merchant, alongside CEO Assaf Rappaport and Google Cloud chief Thomas Kurian, played a crucial role in negotiating the final terms.
Google deemed the premium justified given Wiz’s rapid growth, boasting a 70 percent annual revenue increase and annualized revenue of over $700 million. The deal’s timing was influenced by recent regulatory shifts, with Trump’s appointment of Andrew Ferguson as FTC chair and Gail Slater to oversee antitrust reviews.
Wiz’s leadership remained cautious after witnessing Adobe’s failed $20 billion acquisition of Figma due to antitrust scrutiny in 2023.
While it is unclear whether Google and Wiz proactively consulted U.S. antitrust authorities before signing, the prospect of a friendlier regulatory environment under Trump played a key role in finalizing the deal.
Bank of America advised Google, while Goldman Sachs advised Wiz.
Courtesy: Reuters
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