Google’s parent company Alphabet is said to be in discussion on the prospect of acquiring HubSpot, a marketing software company. If the deal does go ahead, it would be Alphabet’s biggest-ever acquisition yet.
According to reports from Reuters, Alphabet has had discussions with advisers from Morgan Stanley regarding the move. The two parties touched on the size of an acceptable offer for HubSpot. Secondly, Google and the investment bankers discussed whether the deal could be flagged by antitrust authorities.
HubSpot currently has a market valuation of $35 billion. Once the report of a possible acquisition spread, its shares jumped as much as 11% to $693. However, the stocks had a slight drop to $660 toward the end of the trading day.
The Cambridge, Massachusetts-based company was listed in the stock market in 2014. Its client base is on average companies with a staff size of about 2,000 employees. In 2023, HubSpot generated $2.2 billion in revenue and posted a net loss of $176.3 million. Despite this loss, investors are excited about ‘s growth prospects, driving up its shares 50% in the last 12 months.
Alphabet has not tabled any offer and there is no guarantee it will. What may be the biggest barrier to the acquisition is Antitrust regulators. Google is facing two lawsuits from the Department of Justice (DOJ) for allegedly creating monopolies in the digital advertising and search engine markets.
In the European Union (EU), Apple and Alphabet are under investigation for limiting communication and steering. The EU believes Apple and Alphabet restrict businesses from freely contacting customers and offering them better deals outside their app stores (anti-steering).
Google is also facing a separate investigation from the EU for prioritizing its products and services in search results. This potentially gives it an unfair advantage.
