Google’s $32 billion bid for Wiz intensified under Donald Trump, According to Reports

Less than a year after Google’s intentions to purchase Israeli cybersecurity startup Wiz fell through, officials reached an agreement in a frenzy of discussions following the inauguration of US President Donald Trump eight weeks ago. Google increased its original offer of $23 billion in July to $32 billion, making it one of the most significant tech transactions ever. Individuals familiar with the pact said the breakup fee significantly increased to over $3.2 billion. However, the real clincher for Wiz and Google executives was the shift in the White House, which carried with it the potential of a more favorable antitrust assessment under Trump, according to these sources.

Google made another pass last October as Wiz was considering an IPO, according to these sources. While conversations had been infrequent for several months, but according to these sources, executives began meeting frequently to discuss specifics of an agreement following Trump’s Jan. 20 inauguration and the appointment of top antitrust authorities in his administration.

Fazal Merchant also joined Wiz as its new Chief Financial Officer in January, as the business was considering an IPO. According to one of the persons, the merchant and CEO, Assaf Rappapor, helped shape the transaction and saw it through to completion. According to two sources, Google’s cloud executive, Thomas Kurian, played a crucial role in the agreement’s development.

Wiz executives found it challenging to reject Google’s revised offer, which valued the cybersecurity startup 39% higher than the previous bid and included a higher reverse breakup fee of more than $3.2 billion, or more than 10% of the deal value, payable to Wiz if the deal falls through, according to the sources. According to a source involved with the negotiations, Google believes the premium is justified by Wiz’s 70% annual sales growth and annualized revenue of more than $700 million. Buyers pay reverse termination or breakup fees to reimburse target firms when negotiations fall through for regulatory reasons.

Such a hefty breakup fee is unusual in corporate dealmaking in the United States even though such payments have been rising in recent years as regulatory challenges to huge transactions have grown abroad. According to a survey conducted by law firm Fenwick & West on acquisitions of at least $1 billion done in 2023, breakup costs averaged 4% to 7% of the transaction value. Some corporations have proactively alerted US antitrust regulators before striking an agreement. For example, in 2023, Tempur Sealy sought approval from the US Federal Trade Commission before making a $4 billion transaction to purchase Mattress Firm.