What should we glean from Google’s M&A deal with Israeli cyber company Wiz which collapsed in 2024 at $23 billion but was clinched in 2025 at $32 billion? Why walk away from $23 billion? Which side walked away? We discuss below how M&A (mergers & acquisition) deals are done and undone.

Preparing for the deal:

Before any planned M&A deal, there are a number of steps for both sides, the intending buyer and the intending seller. First, prepare the objectives, reasons, information, advisors and the business itself. Second, identify candidates. Third, auction, woo and negotiate. A letter of intent (LOI) may ensue. Fourth, usually in parallel to the foregoing, due diligence (“DD”) by the intending buyer. The seller will check the buyer has finance in place. Fifth, execute the main agreement. Sixth, post-deal integration.

In the Google-Wiz case, the deal collapsed in 2024, reportedly due to antitrust concerns. In 2025, the deal was back on and actually signed. Did the antitrust concerns go away or were there other reasons at play?

What type of deal?

There are many ways to cut an M&A deal. Do the parties envisage a share (stock) sale?  An asset purchase?  A management buyout? An exclusive license or supply contract. Much will depend on which party has the upper hand in the negotiations.

In this case, a share (stock) sale was eventually signed.

The parties’ motives?

In this case, Google had a cash pile of over $110 billion and presumably wanted Wiz and its cloud security technology to help stay ahead.

But Wiz initially said in 2024 that it other options, such as an IPO.

Wiz was founded in 2020 as a cyber security company and adapted its business model a year later to focus on cloud security for big companies. Always look for new trends and look ahead.

Due diligence aspects:

Due diligence means reviewing things. It is usual practice for the seller to give the buyer access to documents in a secure virtual data room.

But what makes the seller business tick?

In the case of Wiz, The R&D took place despite the lack of any R&D grant or tax incentives – just highly motivated geeks with excellent experience (ex-IDF 8200 unit, previous exit success). It seems the geeks are not yet ready to hang up their boots.

Competition:

In the case of Wiz, an arch competitor happens to be CrowdStrike, the Microsoft supplier that apparently caused a global computer system outage on July 19, 2024.

On its website (https://www.crowdstrike.com/compare/crowdstrike-vs-wiz/), CrowdStrike wrote: “Why customers choose CrowdStrike over Wiz?  An incomplete CNAPP (Cloud-native application protection platform); Lacks essential cloud security capabilities; CWP agent entirely lacks runtime prevention, crucial for real-time response; No native ASPM, leading to reduced visibility into application workloads and APIs; Missing native security modules needed for critical alert context and attack path analysis (EDR, identity, threat intel, exposure management).” 

A lot of abbreviations there. Google presumably checked out the technical, financial and legal side of Wiz and its intellectual property (IP), among other things.

And we assume that Wiz had a business plan showing how and when it expects to achieve its goals and exploit its commercial advantage.

Once the deal was finally done in 2025, it was announced that Wiz would become a separate unit of Google providing cyber security both to Google and its competitors, such as Microsoft. That presumably addressed antitrust concerns, among other things….

Taxation:

Sellers usually prefer a share sale. That way shareholders may pay 25%-35% Israeli capital gains tax, or 0% generally if they are foreign investors, but they should check their home country taxation.

But the buyers typically prefer to buy the main assets – which can increase the overall Israeli tax liability for all selling shareholders to around 50%.

Moreover, the buyer must withhold Israeli tax upfront – typically 25%-30% – from the sale consideration unless the sellers produce clearance for any lesser rate of tax.

So, in the Google-Wiz case, investors in Wiz were liable to capital gains tax on the sale of their shares in their country of residence.

So what happened?

Wiz described itself in glowing terms as follows: “Wiz is the #1 cloud security company on the list and one of the biggest movers from last year, alongside OpenAI. What an honor!” (https://www.wiz.io/blog/wiz-the-top-ranked-cloud-security-company-in-forbes-cloud-100)

In our experience, M&A transactions are roughly 10% tax, 10% legal, 10% economic…. and 70% psychological.

Could psychology explain what happened here in 2024 when the M&A deal initially collapsed? Did the higher price of $32 billion eventually sway the founders of Wiz? Psychology (human behavior) plays a large part in most M&A deals.

We believe that psychology, antitrust and tax factors played a role in the outcome – Google eventually bought Wiz in 2025 for a cool $32 billion. It was announced that Wiz will continue as a cyber unit of Google. It will not lay off its work force. It may even supply cyber security services to arch-rival Microsoft. All this demonstrates that Wiz will continue as a going concern.

Nice job after only 5 years of Wiz.

Next Steps:

• Start planning the ingredients of your proposed acquisition or sale based on the above.
• Many of the surprises may be predictable with proper preparation.
• What is the other side really after? Can you read between the lines?
• What is the post-deal tax strategy?
• Are there antitrust issues and/or other regulatory requirements to meet?
• How will the seller integrate its operations with the buyer after the deal?
• Will the seller’s work force be laid off?
• Consult legal and professional advisors in each country concerned in specific cases.
• Contact us if you are looking for an M&A candidate to buy or sell.
• Contact us if you have your candidate and want to prepare for an M&A deal.

© Leon Harris 19.5.25, all rights reserved.  Email: [email protected],  Cell: +972-54-6449398.