Report: Google-Wiz Acquisition Falls Apart

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Jul 23, 2024

Image copyright: Gary Hershorn/Contributor/Corbis News via Getty Imagesstory last updated Jul 24

The Facts

Cloud computing start-up Wiz has decided not to accept Google parent company Alphabet's reported acquisition offer of $23B, according to a memo, instead choosing to pursue an initial public offering (IPO) of $1B. CEO Assaf Rappaport reportedly cited US antitrust and investor concerns as reasons.
Wiz, founded by four former Israeli military officers in 2020, has been valued at $12B, making the decision to back out of the deal "tough," according to an email written by Rappaport. The co-founders each own 9% of the company, with venture firms Index Ventures, Sequoia Capital, and Thrive Capital, among others, also owning stakes.

The Spin

Narrative A

It seems growing antitrust sentiments have scared Wiz into backing down. As this $23B offer was certainly difficult to turn down, the regulatory pressure from Washington was strong enough to send Wiz to a risky IPO over the easy acquisition money, and marks a significant setback for Google.

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Narrative B

While this is certainly a setback for Google, it could also have repercussions for Israel. Contributing 20% to the nation's GDP, Israel — suffering economic damage from the ongoing war — is dependent on the tech company, and any loss of confidence in it will directly impact the country's economy. This isn't a smart move.