One Scoop to Start: Social Media Site X’s rating skyrocketed to $44 billion, highlighting a sharp shift in the company’s fate as owner Elon Musk took on the role of a stubborn ally to US President Donald Trump.
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In today’s newsletter:
Google Tests Trump’s Anti-Trust Regime
Japanese Buffett’s Baby Berkshire
Saudi Arabia consultant cash will dry
Google will be M&A with
Google Parent Alphabet announced on Tuesday that it sealed its biggest acquisition in history and agreed to buy cybersecurity startup Wiz for $32 billion after active negotiations.
The deal marked a sharp reversal of the property after both parties waived the contract last summer.
So, what has changed since then? Top of the list: New US President and about $10 billion in cash.
Last time, Alphabet’s $23 billion offer failed to reach an agreement after members of the boards of both companies expressed skepticism about whether the deal could be acquired past regulatory authorities.
But it was under former President Joe Biden. While Donald Trump’s White House shows that it won’t easily fall over at approval of the merger, the deal shows that businesses are willing to test the new administration’s risk appetite.
When the DD team scooped it up, it was important that Alphabet agreed to pay Wiz an unusually $3.2 billion break fee if the transaction collapsed.
Alphabet sets a new record for the biggest acquisition, easily surpassing Motorola Mobility’s $12.5 billion acquisition, marking the biggest M&A deal for venture company M&A if it is able to close the transaction.
One group of people who support the transaction are investors in With. Five years ago, the company was backed by VCs, including Index Venture, the largest shareholder with over 12% stakes.
Other major shareholders include Greennoke, Insight Partners, Sequoia Capital, Andreesen Horowitz, G Squared, Lightspeed Venture Partners and Wellington. Another major investor is Israeli fund Cyberstote, which first invested $7 million in With’s seed rounds. Thrive Capital, a VC company founded by Josh Kushner, brother of Trump’s son-in-law Jared Kushner, also has a big bet.
The deal was celebrated among the Goldman Sachs bankers, who were Wiz’s advisors, and the alphabet was advised by Bank of America.
We conclude with the rise of With Meteor, founded in 2020 by alumni of Israel’s Elite Cyber Intelligence Unit. Wiz’s CEO Assaf Rappaport had previously sold startups to Microsoft, but the team grew even bigger with the next venture.
Prices may be eye-opening, but Alphabet’s CEO Sundal Pichai bets on driving the growth of its cloud business, competing with Amazon’s AWS, Microsoft’s Navy Zure and Oracle.
Also, Wiz, which generates regular revenues of around $700 million per year, can bypass the choppy IPO market. Go deeper with Lex.
Buffett inflates Japanese baby Berkshire
Warren Buffett once jokingly looked in the mirror as he searched for advice.
By his own admission, the mirror image of his investment conglomerate Berkshire Hathaway is Japan’s top five traders.
This week, Buffett followed the signal that he lifted shares in Berkshire Ituch, Mitsubishi Corporation, Mitsui, Malbeni and Sumitomo Corporation.
Just as his conglomerate moved to diverse investment giants far beyond the roots of making its fabrics, traders began with the fabrics and commodities essential to rebuilding the postwar Japanese economy. Recently, their businesses have reached chemicals, insurance, real estate, and shopped salmon, ramen noodles and TV.
In a letter from Berkshire’s annual shareholders released last month, Buffett praised the trading company. His company has been holding a trader since 2019 and plans to maintain a “decades” interest.
They already have all the indications that they are a good investment in Buffett, with holdings reaching $23.5 billion at the end of 2024 with a total cost of $13.8 billion.
Buffett’s doubling in traders is fighting Berkshire’s $334 billion cash pile after selling $143 billion in stock last year.
Despite the trading house chief agreeing to ease the trading company’s 10% shareholding cap, Berkshire is still below all five-person thresholds.
The purchase helped to increase value as each share increased around 3% on Tuesday.
Japanese traders face challenges. Tariffs and inflation threaten consumer demand for products. Deflationary China allows you to push down the price of a product.
Similarly, they are ready to take advantage of the opportunities arising from sorting the global economy under Trump to reopening to Russia’s European defence spending.
In any case, Omaha’s Oracle is betting that Japanese investment champions will make money, as well as increasing dividends, lifting stock buybacks and paying more modest salaries than their US counterparts.
When everything else looks ugly in the world, you’re better off preferring what you look like a mirror.
The end of Saudi Arabia’s “blank check era”
Being a management consultant in Saudi Arabia was not said to be particularly easy. I’ve had lots of calls from clients at 4am or Christmas Eve.
Still, few people complained. Driven by the Kingdom’s Transformational Vision 2030 agenda, including Giga projects such as Neom, the fierce expansion of the Saudi market over the past few years has provided partners with profitable business as colleagues in places where colleagues have been sluggish like London.
However, as 2030 approaches and officials are under pressure to show results, it appears that Saudi Arabia’s “blank check” era is over as they question whether the enormous spending on consultants is worth it.
“We expect people in the industry to consider questions that are right for the money for a while,” said the executive, one of the biggest consultants.
The PWC sees Saudi Arabia as the first notable victim of an increase in discomfort for businesses that they have resorted to for all their support, from strategy to providing additional talent.
Big For Farm has served as a one-year ban on new work with Saudi Arabia’s strong public investment fund, which is driving economic diversification plans. The FT reports that the ban occurred after PWC and PIF clashed over the former attempt to hire senior executives from one of the latter major projects.
It’s fair to say that the temporary ban on PWC has caused tremors in the industry. “It’s all the conversation,” an executive told DD.
But for regulars on Dubai Riyadh Sunday Night Flight, that’s not over.
The boom is slowing, and increasing competition between businesses means Saudi Arabian clients can demand lower prices, but they don’t think the Kingdom’s consultant market is about to die down. Research firm Source Global believes the sector will continue to grow in double digits this year.
Job movements
According to Bloomberg, Richard Perry joined Olympus Peak Management as a partner. He will rejoin the hedge fund industry after nine years of rest.
Citigroup has appointed Michael Lovell as Vice Chair of Global Finance.
TPG has appointed Jennifer Chu as partner, Chief Legal Officer and legal counsel. Chu was previously vice-chairman of Debevoise & Plimpton’s M&A group.
William Parth has appointed chairman of U.S. government housing agencies Fannie Mae and Freddie Mack as part of an overhaul of the boards of both companies and the Trump administration’s ouster of 14 directors.
KSL Capital Partners has appointed Tim Dattels, Alex Dichter and Ted Seides as senior advisors.
Andrew Johnson has been named global head of communications and public relations for Lone Star Funds. He previously led communications at GTCR.
Smart Lead
Dei Backlash Morgan Stanley’s diversity initiative has completely disrupted staff, the Wall Street Journal reports. The company is currently excluded from measures.
Automobile Customs Automotive executives have previously been spared Donald Trump’s tariffs in Mexico and China, Fort wrote. But they worry that component duties may be on the agenda of the US President.
Rotating Chinese automakers is rapidly seizing market share across emerging markets, and Trump’s tariffs are unlikely to stop them, Bloomberg reports.
News Round Up
Wall Street stocks slide when tech stocks sell picks up pace (FT)
BYD shares hit record highs with five minute EV charging claims (FT)
Thames Water Planjone Equity Trading (FT)
BOFA Survey Show (FT) will significantly reduce US stock holdings so far
Short sellers earn $16 billion from Tesla’s stock price plunge (FT)
Howard Lutnick promotes Elon Musk’s Starlink for US Broadband Scheme (FT)
Due diligence was written by Arash Massoudi, Ivan Levingston, Ortenca Aliaj, Robert Smith, James Fontanella-Khan, Sujeet Indap, Eric Platt, Antoine Gara, Amelia Pollard and Maria Heeter of London. Send feedback to due.diligence@ft.com
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