Commentary

Google's Parent Could Make A $33B Acquisition, But Face Regulatory Hurdles

If Google's parent Alphabet acquires HubSpot, the deal would be worth more than $33 billion, according to some estimates -- HubSpo's current market cap.

Rumors began last week that Alphabet may consider a bid for HubSpot. 

The greatest challenge the company would have is today's antitrust environment, which seems anti-big tech. This makes the prospect of a successful deal questionable, according to CB Insights.

Google also faces two ongoing lawsuits from the Department of Justice (DOJ). An acquisition of this size would complicate matters. 

It would certainly be an unusual deal for Alphabet, according to CB Insights, which listed its top 10 merger and acquisition deals.

  1. HubSpot (rumor) - $33B+
  2. Motorola Mobility (2012) - $12.5B
  3. Mandiant (2022) - $5.4B
  4. Nest (2014) - $3.2B
  5. DoubleClick (2007) - $3.1B
  6. Looker (2019) - $2.6B
  7. Fitbit (2021) - $2.1B
  8. YouTube (2006) - $1.7B
  9. Waze (2013) - $1.15B
  10. HTC - Pixel Smartphone Division (2018) - $1.1B

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Support from Google would help HubSpot climb in the space to become a stronger CRM competitor against companies such as Adobe, Microsoft and Salesforce.

HubSpot in 2022 held a 4.9% market share in the CRM space, while Salesforce and Adobe each held 15% share, according to analyst firm Gartner.

Reports surfaced last week that Alphabet has met with Morgan Stanley investment bankers about a potential offer price for HubSpot.

The deal would prompt a new fight with regulators. Seth Bloom, a former general counsel of the U.S. Senate antitrust subcommittee, told Reuters this type of deal "would face a pretty tough reception from the antitrust regulators." Bloom now runs his own advisory firm. 

Alphabet could afford the deal, reports The Motley Fool. The company has roughly $111 billion in cash and equivalents on its balance sheet and will likely add more with each quarter.

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About the Author

Laurie Sullivan is a writer and editor for MediaPost. You can reach Laurie at lauriesullivan@gmail.com.