Alphabet Withdraws Acquisition Plan for HubSpot... HubSpot Stock Plummets 12%

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Google's parent company Alphabet's review process to acquire online marketing software firm HubSpot has been ultimately canceled. The market believes that the stance of major regulatory authorities, which have been putting brakes on mergers and alliances among big tech companies this year, had a significant impact.

On the 10th (local time), Bloomberg News, citing anonymous sources, reported, "Alphabet showed interest in acquiring HubSpot earlier this year, but in recent weeks, the deal failed to reach the due diligence stage and was ultimately canceled."

Alphabet's potential acquisition of HubSpot was regarded as the largest big tech merger and acquisition (M&A) deal this year. It was also expected to be the most expensive deal Alphabet has made since its founding. HubSpot's market value is approximately $35 billion. The news that Alphabet was considering acquiring HubSpot first emerged in April.

HubSpot provides advertising content creation software, with its main customer base being small and medium-sized enterprises. Due to its rapid growth, it attracted the interest of big tech companies. Last year, its revenue reached $2.2 billion, and its revenue growth rate averaged over 20% for six consecutive quarters. In the first quarter of this year, revenue was $617.4 million, a 23% increase compared to the same period last year. Bloomberg explained, "If Alphabet had acquired HubSpot, it would have gained an advantage in competition against Microsoft (MS), Oracle, Salesforce, and others."

The cancellation of Alphabet's acquisition of HubSpot is attributed to the possibility of antitrust investigations by regulatory authorities in the United States and the European Union (EU). Big tech companies have been able to generate massive surplus cash flow based on market dominance and have grown by acquiring other companies, but recently, major regulatory authorities have viewed this negatively.

Following this news, HubSpot's stock price plunged about 12% at the close of trading on the New York Stock Exchange that day. During the session, it even fell as much as 19%, the largest drop since 2020. HubSpot's market capitalization shrank to about $25 billion (approximately 34.5 trillion won).