Google’s $32 Billion Wiz Buyout Fast-Tracked Under Donald Trump’s Leadership: Report

<p>Google’s parent company, Alphabet Inc, acquired Israeli cybersecurity start-up Wiz on Tuesday in a record-breaking deal worth $32 billion. The amount was significantly higher than the original offer of $23 billion made by the tech giant last year in July.</p>
<p>In addition to the revised offer, which made this the largest tech deal in history, Google also ramped up the breakup fee to over $3.2 billion, reported Reuters. However, citing sources in the know, the report said that the change in US leadership played a crucial role in helping the deal go through.</p>
<p>Less than a year after the initial deal fell apart, negotiations resumed, and executives reached an agreement just eight weeks into Donald Trump&rsquo;s presidency. This change was driven by the executives anticipating a more favourable antitrust review under Trump&rsquo;s administration, the report said.</p>
<h3>Key Executives and Negotiations Timeline</h3>
<p>Discussions between Google and Wiz continued sporadically in late 2024 while Wiz explored a potential IPO. However, negotiations picked up momentum after Trump&rsquo;s inauguration on January 20 and the appointment of key antitrust officials in his administration, the report noted. Executives from both companies reportedly met regularly to finalise the terms of the acquisition.</p>
<p>Wiz appointed Fazal Merchant as Chief Financial Officer in January while still considering an IPO. Merchant, alongside CEO Assaf Rappaport, played a significant role in driving the deal to completion. Google Cloud chief Thomas Kurian was also a key figure in the negotiations, the report added.</p>
<p>Bank of America acted as Google&rsquo;s financial advisor, while Goldman Sachs advised Wiz on the deal.</p>
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<h3>Google&rsquo;s Justification for the Premium Offer</h3>
<p>Wiz executives found the revised offer difficult to refuse. The new valuation was 39 per cent higher than Google&rsquo;s previous bid and included a reverse breakup fee exceeding $3.2 billion&mdash;over 10 per cent of the total deal value. This fee would be paid to Wiz if regulatory issues caused the deal to collapse.</p>
<p>Google saw the premium as a justified investment, considering Wiz&rsquo;s 70 per cent annual revenue growth and over $700 million in annualised revenue, the media agency said.</p>
<p>Reverse termination fees, or breakup fees, are commonly used to protect target companies from financial losses when deals fail due to regulatory challenges. However, a fee of this size is rare.</p>
<p>A 2023 study by law firm Fenwick &amp; West found that breakup fees for billion-dollar deals typically ranged between 4 per cent and 7 per cent of the total transaction value.</p>
<p>However, the report added that it remains unclear whether Google and Wiz engaged with US antitrust regulators before signing the deal. Some companies take a proactive approach by briefing watchdogs in advance. For instance, in 2023, Tempur Sealy sought approval from the Federal Trade Commission (FTC) before finalising its $4 billion acquisition of Mattress Firm.</p>
<h3>Regulatory Concerns</h3>
<p>Wiz executives were cautious after witnessing Adobe&rsquo;s failed $20 billion takeover of Figma in late 2023, which collapsed under antitrust scrutiny. Google, too, remains entangled in legal battles with the US Department of Justice over its dominance in online search and digital advertising technology.</p>
<p>Initially, Google offered Wiz a breakup fee of approximately $2 billion, but Wiz&rsquo;s leadership believed this amount was insufficient given the regulatory risks. Some of the cybersecurity firm&rsquo;s biggest venture capital investors feared that then-FTC Chair Lina Khan would challenge the deal.</p>
<p>The appointment of Andrew Ferguson as the new FTC chair and Gail Slater to oversee antitrust reviews at the Justice Department boosted confidence in a smoother approval process. Citing sources close to the matter, the report added that this leadership shift reassured executives at both companies. However, neither Google, Wiz, the White House, nor the Justice Department has commented on the acquisition.</p>
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