Alphabet walks away from HubSpot deal

Google’s parent company Alphabet is reportedly not looking to acquire HubSpot due to increased regulatory scrutiny over acquisitions in the tech sector due to antitrust laws.

In April this year, reports emerged that Alphabet was considering acquiring HubSpot to strengthen its position in the CRM and cloud solutions space.

At the time, reports emerged that Alphabet was talking to its advisors about the possibility of making a takeover bid for HubSpot, a provider of online marketing software with a market value of $25 billion.

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No takeover

HubSpot provides marketing software to companies typically employing up to 2,000 people. The company has been publicly traded since 2014.

The HubSpot acquisition would potentially expand Google’s offering in the growing customer relationship management (CRM) software market.

The deal would also allow Alphabet to reach a broader base of corporate customers who spend money on marketing and advertising.

Similarly, Google could benefit from cloud computing as it seeks to close the gap with market leaders AWS and Microsoft.

However, Reuters, citing a person familiar with the matter, has now reported that Alphabet decided several weeks ago to abandon the acquisition of HubSpot.

If the deal goes through, it could be the largest acquisition in Alphabet’s history.

Talks between Alphabet and HubSpot never progressed beyond the due diligence phase and fell through shortly after the companies held initial discussions about a potential deal, Reuters reports, citing a source.

Antitrust issue?

If Alphabet were to acquire HubSpot, it would likely trigger some sort of regulatory backlash, as governments and competition authorities in major geographies like the U.S., U.K. and Europe have become increasingly skeptical of tech takeovers.

Google may argue that the acquisition will strengthen competition in the marketing and sales software sector and pose a real challenge to the dominance of companies like Salesforce and Microsoft.

But Google faces numerous antitrust challenges on both sides of the Atlantic, including a landmark U.S. lawsuit accusing the company of abusing its market leadership in online search.