The US Justice Department has started investigating whether Google’s proposed $32 billion (£23.6 billion) acquisition of cloud security firm Wiz will unlawfully restrict competition, according to media reports.
Since the deal’s announcement in March, officials in the department’s antitrust division have been looking into it, according to the article.
According to the media, the investigation is still in its early phases and may take many more months before the Justice Department makes a decision on whether to attempt to thwart the purchase or let it to move forward.
‘Humbling’
These inquiries usually involve conversations with the merging businesses as well as clients and rival businesses.
According to an earlier media report, Wiz executives were cautious after Adobe’s planned $20 billion buyout of Figma collapsed due to antitrust objections in late 2023, indicating that the possibility of antitrust scrutiny had been a key issue for the firms discussing the merger.
According to that story, discussions sped up after President Donald Trump became weary of the idea of less regulatory monitoring.
Google allegedly agreed to pay Wiz a fee of more than $3.2 billion if the acquisition does not close, indicating that the businesses anticipated possible difficulties.
Wiz called the offer “humbling” and turned down a previous Google deal in favor of a public listing in July 2024.
The goal of the transaction, which would be Google’s biggest acquisition to date, is to strengthen the company’s cloud computing division, which faces competition from companies like Microsoft, Amazon, Oracle, and others.
Wiz’s service also works with cloud offerings from those competing companies.
Regulatory pressure
Although it was not contested, Google’s $5.4 billion acquisition of cyber-security company Mandiant in 2022 also drew a DOJ probe.
Mandiant was Google’s third-largest acquisition to date; the company’s 2012 acquisition of Motorola Mobility, which cost $12.5 billion and strengthened its Android division, was the second-largest.
In January 2014, Google paid $2.9 billion to Lenovo for Motorola Mobility.
The significant agreement comes as Google is under a lot of government antitrust scrutiny after federal judges determined that the company had unlawful monopolies in the internet search and other advertising technology areas.
The decisions may compel it to sell off some of its most important commercial divisions, like its advertising tools or Chrome browser.
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