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Alphabet abandons acquisition of HubSpot

Alphabet abandons acquisition of HubSpot

Alphabet’s plan to acquire HubSpot will not be pursued. According to Bloomberg, the acquisition didn’t get to due-diligence stage.

The two parties had been discussing a possible acquisition of the CRM vendor since April. According to Bloomberg sources, Alphabet and HubSpot failed to agree on details after an investigation. The exact cause of the breakdown in negotiations is not known.

Alphabet has shown strong interest in acquiring the CRM vendor since April this year. HubSpot focuses mainly on the SME segment, and an acquisition would allow the tech giant to compete with other major CRM vendors such as Microsoft, Oracle, and Salesforce.

In addition, HubSpot offers automation tools for marketing and advertising campaigns and distributing content for these purposes. Furthermore, the CRM giant’s solutions support customer service agents in their daily tasks.

Utter surprise

Experts were surprised by the breakdown of negotiations. They expected both parties to be in a finalizing stage by now and that at this point, the exact terms would be determined.

If Alphabet had acquired HubSpot, it would have been the tech giant’s largest tech acquisition ever. Even bigger than the $12.5 billion acquisition of Motorola Mobility in 2011.

More oversight

By the way, any agreement between the two parties would not have meant that the acquisition could actually take place. Bloomberg further writes that this acquisition would be critically scrutinized by competition authorities, especially U.S. and European ones, to prevent the possible creation of monopolies.

The Biden administration in the U.S., for example, has become much stricter in recent years regarding tech sector acquisitions. For example, Amazon recently abandoned its acquisition of robot vacuum cleaner specialist iRobot. Microsoft had great difficulty following through on acquiring Activision Blizzard, and Nvidia had to abandon a buyout of Arm.

Shares of HubSpot fell 19 per cent after Alphabet announced its failed acquisition, the sharpest drop since 2020.

Also read: Google parent weighing up its biggest acquisition target ever: HubSpot