Will M&A Floodgates Open

Travis Hoium
03-27

I think $Alphabet(GOOG)$ $Alphabet(GOOGL)$ made a masterful move this week. It announced the $32 billion acquisition of Wiz, the cloud security firm.

I’m not a cybersecurity or cloud security expert, so I won’t play on here. Everything I’ve read is this is a high price but a potentially valuable asset for Google Cloud to have in the market.

What may matter most about this deal is whether or not it gets through regulators. Under the Biden Administration, $Amazon.com(AMZN)$ was blocked from buying Roomba, $Spirit AeroSystems(SPR)$ couldn’t merge with JetBlue, and $Meta Platforms, Inc.(META)$ went through the ringer trying to acquire a tiny VR workout app. This put mergers and acquisition on hold for most of the last four years as big tech companies didn’t even try to buy any startups.

Have the tables turned?

  • I think this acquisition will be looked at closely by investors and tech because if it’s approved the floodgates open again.

  • The process will be important as new regulators have said they will be decisive rather than use delay tactics, like the previous administration.

Alphabet is putting the pressure on the administration with this deal because it’s the first big move made by big tech. If this deal closes, others will follow.

If it doesn’t close, investors and executives will be wondering if the talk of a better business environment was all a lie.

I think that’s brilliant by Alphabet. The Trump Administration won’t want to look like it’s anti-business so the deal likely goes through.

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