Google’s Wiz acquisition draws antitrust interest from Justice Department

Google is planning to acquire cybersecurity company Wiz Inc. for billions of dollars, and according to sources familiar with the matter, Justice Department antitrust enforcers are trying to determine whether the planned acquisition would illegally limit competition in the marketplace.

Officials in the department’s antitrust division, who are probing the deal, have reportedly been examining the details of the Alphabet Inc. unit’s plan following its announcement in March, said the sources, who asked to be kept anonymous.

Such inquiries include discussions with the merging companies as well as competitors and customers. The review, which is still in its early stages, is expected to last some months and will ultimately determine whether US officials let the deal proceed.
The review is in its early stages and could take months

Full-scale antitrust merger reviews are relatively rare compared to the number of deals announced each year, so the firms have been preparing for scrutiny.

Google has agreed to pay Wiz a breakup fee of about $3.2 billion, or about 10% of the deal value, if it doesn’t close, which is a risk as the iconic company has been facing intense antitrust scrutiny from Washington.

In the past year, federal judges found that it has illegal monopolies in online search and some advertising technology markets.

As such, it is facing a potential breakup of large parts of its business, including its Chrome web browser and some advertising tools used to place display ads around the web.
Google’s planned acquisition of Wiz is one of its largest purchases

Wiz is not Google’s first large cybersecurity purchase. In 2022, it acquired Mandiant for $5.4 billion in an effort to bulk up its cloud computing business, which has historically lagged behind its peers.
Google’s Wiz acquisition draws antitrust interest from Justice Department
Google’s largest acquisitions by dollar value. Source: App Economy Insights

If the deal goes through, it will have set a record as one of the company’s largest purchases, beating its Motorola purchase of $12.5 billion and the Mandiant acquisition of $5.4 billion.

Mandiant and Wiz provide complementary services. However, while Mandiant specializes in threat intelligence and cyber breaches, Wiz’s tools do that and work to identify and block threats across organizations’ often-complex cloud environments.

Wiz is also integrated with competing services from Amazon.com Inc., Oracle Corp. and Microsoft.

While announcing the deal, Google touted the acquisition as a way to beef up its cloud security offerings and provide customers with new ways to keep their systems secure in a new era of AI.

Both companies have said Wiz’s products will continue to work on major cloud platforms, including competing services.

Google’s attempt to acquire Wiz is happening at a time when the cloud security market is booming. The market is already worth over $30 billion today, and that value is expected to triple by 2034.

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