Alphabet Inc., the parent company of Google (GOOGL.O), has decided against pursuing a takeover of HubSpot Inc. (HUBS.N), according to a source familiar with the matter. Talks between the two companies never progressed beyond initial discussions, failing to reach the due diligence stage, the source disclosed on Wednesday under conditions of anonymity.
HubSpot’s shares plummeted by 12% in response to the news, contrasting with Alphabet’s modest 1.2% rise following the decision. Earlier reports from Reuters had hinted at Alphabet’s contemplation of an acquisition offer for HubSpot, valued at approximately $25 billion today.
The potential acquisition would have marked Alphabet’s largest-ever deal but faced considerable regulatory scrutiny amid a climate increasingly hostile to tech industry consolidation. HubSpot specializes in inbound marketing software tailored for small and medium-sized enterprises, allowing businesses to engage consumers through interactive advertising content.
HubSpot’s CEO, Yamini Rangan, acknowledged weakened customer demand in May, attributing it to economic uncertainties tied to rising interest rates affecting small businesses.
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