Google parent company Alphabet is reportedly considering making a bid to acquire HubSpot.
The firm has met with investment bankers to discuss how much it should offer and whether it would face challenges from regulators, Reuters reported Thursday (April 4), citing unnamed sources.
Alphabet has not submitted an offer, and it may not do so, according to the report.
A HubSpot spokesperson told Reuters that the company “does not comment on rumors or speculation.”
Alphabet did not immediately reply to PYMNTS’ request for comment.
The potential acquisition would be Alphabet’s largest ever, according to the report. HubSpot, which offers online marketing software, has a market value of $35 billion.
An acquisition of HubSpot would expand Google’s offerings in the customer relationship management (CRM) market; create new opportunities for its cloud computing business; and provide new areas of growth at a time when Alphabet’s advertising business is facing greater competition and lower-than-expected sales in the fourth quarter, the report said.
The deal would also come at a time when there is greater regulatory scrutiny of tech deals under the President Joe Biden administration, per the report. However, Alphabet could present a case to antitrust regulators that the combination would create more competition in a sector that is currently dominated by Salesforce’s and Microsoft’s marketing and sales software.
During an earnings call in January, Alphabet Chief Financial Officer Ruth Porat said the company continues to make “sizable investments with increased emphasis on our Pixel family particularly with AI-powered innovation.”
Later in the call, Porat said that “the strong demand we are seeing for our vertically integrated AI portfolio is creating new opportunities for Google Cloud across every product area.”
It was reported in March that major merger and acquisition (M&A) deals — agreements worth at least $10 billion — more than doubled during the first quarter.
Eleven of those deals, valued at a total of $215 billion, were forged in the first three months of 2024, compared to five takeovers, valued at $100 billion, in the first quarter of 2023.
The jump in activity followed a year in which the level reached the lowest point in a decade.