What was set to be Google’s biggest-ever acquisition appears to have fizzled out after the tech giant’s $23 billion (£18 billion) takeover talks with Israeli cybersecurity firm Wiz were called off.
Wiz CEO Assaf Rappaport said the company took the decision to end discussions in order to return to its original plans for an initial public offering. In a note to staff seen by Reuters he said: "Saying no to such humbling offers is tough, but with our exceptional team, I feel confident in making that choice."
Wiz had already demonstrated its ability to secure its own sources of funding, having raised $1 billion from investors in May at a $12 billion valuation before Google approached the the firm with a much higher offer.
The rebuff is likely to come as a blow to Google, which has been seeking to invest heavily in its cloud infrastructure capabilities to stay competitive with its Big Tech rivals, having already acquired US cybersecurity firm Mandiant in 2022 for $ 5.4 billion.
Dr Marc Manzano, general manager of cybersecurity at SandboxAQ, said: “Google has been lagging behind Amazon Web Services and Microsoft Azure…the potential acquisition of Wiz highlights Google's ambition to dominate the cloud security space.”
The abandoned talks follows the collapse of another potential deal to acquire marketing software HubSpot, which is understood to have fizzled out several weeks ago. But any successful deal with Wiz was likely to have attracted intense scrutiny by competition regulators, who have grown increasingly averse to M&A activity by big tech companies.
Rappaport may have been emboldened to go it alone by the knock suffered last week by cybersecurity rival CrowdStrike, whose botched software upgrade led to widespread IT outages and thousands of flight cancellations.
CrowdStrike has seen its shares tank by around a third, wiping tens billions of dollars from its market cap, while the boards of its biggest clients are reportedly mulling a rethink of their cloud and security strategies in order to move away from overreliance on a single vendor.
