Google has launched a major move in cybersecurity with its announcement of acquiring Wiz for $32 billion, marking its largest purchase to date. However, facing ongoing strong antitrust pressures in the United States, the tech giant has taken precautions: should the deal fail, it will pay Wiz $3.2 billion, a record-breaking penalty.
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A Tense Transaction
The deal is far from sealed. In 2024, Google had previously attempted to purchase Wiz for $23 billion, but the deal fell through under the scrutiny of the Federal Trade Commission. This time, the bid has been increased by 39% to attract the Israeli startup, which has shown outrageous growth (+70% revenue, exceeding $700 million).
To add some security to the deal, a record penalty of 10% of the total purchase amount has been stipulated. Simply put: that amounts to $3.2 billion, a figure rarely seen in the history of mergers and acquisitions. Typically, these penalties range from 2 to 7%, but Google appears willing to do whatever it takes to avoid another failure.
Antitrust Atmosphere Influencing the Deal
Google is putting up a lot of money because U.S. regulators are watching Big Tech acquisitions very, very closely. The FTC, led until January by Lina Khan, has launched multiple investigations against the GAFAM companies, and even though her successor Andrew Ferguson has promised a different approach, he remains wary of large tech corporations.
Despite this, Google and Wiz are hoping for a more favorable review, especially following Donald Trump’s entry to the White House, which could sway antitrust policy. Nevertheless, nothing is certain yet, and this acquisition could become a significant real-world test for the U.S. administration.