Google parent Alphabet abandons efforts to acquire HubSpot

(Bloomberg) — Alphabet Inc., Google’s parent company, has abandoned its efforts to acquire HubSpot Inc., according to people familiar with the matter, ending the prospect of a deal that would have been one of the biggest of the year.

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Shares of HubSpot, a customer relationship management company, fell as much as 19% on the New York Stock Exchange on Wednesday, the biggest drop since 2020, giving the company a market value of about $25 billion.

Alphabet had expressed interest in a possible deal with HubSpot earlier this year, but the parties have not reached a point of detailed discussions around due diligence, said the people, who asked not to be identified discussing confidential matters.

A representative from Alphabet did not immediately respond to a request for comment. A HubSpot spokesperson declined to comment.

Any deal for HubSpot would have been one of the largest this year for a technology company, putting it in the same category as Synopsys Inc.’s pending $34 billion acquisition of Ansys Inc., according to data compiled by Bloomberg.

The purchase of Cambridge, Massachusetts-based HubSpot, which focuses on small and midsize businesses, would have helped Alphabet compete with other players in that market such as Microsoft Corp., Oracle Corp. and Salesforce Inc.

Such a deal would also likely have been mired in U.S. antitrust scrutiny. Under the Biden administration, the Justice Department and the Federal Trade Commission have made clear their opposition to large mergers and acquisitions, forcing big tech companies to rethink their plans for growth through acquisitions.

HubSpot shares peaked in April at about $682 apiece. Since then, the stock had fallen 21% through Wednesday. Alphabet shares are up about 37% this year.

–With assistance from Brody Ford, Katie Roof and Davey Alba.

(Updated with HubSpot share drop in second paragraph.)

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