ServiceNow’s acquisition of AI startup Moveworks is being reviewed due to antitrust concerns, according to reports.
The $2.85B takeover – the largest acquisition in ServiceNow’s history – was revealed in March, but the deal is now being examined by the United States Justice Department, according to Bloomberg.
The investigation, which started in June, has now escalated, with both companies receiving a “second request” for more information, according to the publication, which cited sources “familiar with the matter”.
The Deal In Depth
Moveworks offers agentic AI solutions for its clients. Its customers have included Broadcom, Pinterest, and cybersecurity company Palo Alto Networks.
Reuters reported earlier this year that Moveworks’s staff of more than 500 employees would join ServiceNow.
ServiceNow Chief Financial Officer Gina Mastantuono told Reuters at the time: “We have no plans at this time to make any layoff announcements related to this deal.”
Mastantuono had said the company did not expect any potential regulatory hurdles for the deal, reports from March revealed.
ServiceNow’s “Now Assist” competes with the AI chatbot provided by Moveworks, but they take different approaches.
Moveworks’s chatbot can be integrated with platforms like ServiceNow, Microsoft’s SharePoint, and Salesforce’s Slack.
Moveworks had closed $200M in Series-C fundraising, led by Tiger Global and Alkeon Capital, in 2021, taking its total funding to $315 million, Reuters had reported in March.
ServiceNow’s lead financial adviser for the deal was revealed earlier this year to be J.P. Morgan Securities LLC.
Final Thoughts
Reports of the antitrust review raise interesting questions not just for ServiceNow, but the tech sector as a whole.
How this will play out remains to be seen, but industry giants and small ISVs alike will likely be watching with great interest for any precedent set by the US government, and the reasons behind any potential action taken.
NowBen has contacted ServiceNow for comment.