Paul Biggar: Google Buyout Won’t Fix Israel’s Spy-Run Tech Sector
MintPress NewsJUL 25 2024
Report: Google-Wiz Acquisition Falls Apart
Image copyright: Gary Hershorn/Contributor/Corbis News via Getty Images
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 deal would have been Google's largest-ever acquisition — almost double its $12.5B purchase of Motorola Mobility in 2012.
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.
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.
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