Wiz has declined a reported $23 billion acquisition offer from Alphabet, Google’s parent company, and will instead focus on a previously planned initial public offering (IPO), according to a company memo.
This decision eliminates the possibility of what would have been the largest acquisition in Google’s 25-year history.
In a memo to Wiz employees on Monday, CEO Assaf Rappaport acknowledged that rejecting such a substantial offer was challenging but emphasized that the company is concentrating on its own upcoming goals, which include going public and achieving $1 billion in annual recurring revenue.
Interest in a potential deal between Wiz and Alphabet heightened over the past week, as several outlets reported advanced discussions based on unnamed sources.
However, neither company officially confirmed the negotiations. The note to employees did not mention Google or Alphabet by name, instead referring vaguely to “buzz about a potential acquisition.”
Acquisition negotiations can be unpredictable, and in the current environment dominated by Big Tech, such deals often raise antitrust concerns.
Although the proposed acquisition of Wiz is no longer being pursued, it was intended to bolster Alphabet’s presence in the cloud computing sector, currently dominated by Amazon and Microsoft.
The existing competitive space might have offered Alphabet some flexibility to address any regulatory concerns.
However, Google has faced scrutiny before, with the U.S. Justice Department targeting its core businesses of internet search and digital advertising in separate antitrust lawsuits.
Wedbush analysts noted in a Tuesday report that the abandonment of this deal could have sector-wide repercussions, potentially accelerating Google’s cybersecurity initiatives.
They also predicted that there might be increased consolidation within the cybersecurity sector as tech giants seek vendors to enhance their platforms.
Wiz, a New York-based startup founded four years ago, develops security tools designed to protect data stored in remote data centers. In May, the company announced it had raised $1 billion in venture capital funding, which valued it at $12 billion.
