The U.K.’s Competition and Markets Authority has launched an investigation into IBM’s $6.4 billion acquisition of Hashicorp. The merger was supposed to close in 2024.
IBM’s blockbuster $6.4 billion acquisition of Terraform creator and cloud provider HashiCorp has been temporarily halted by the U.K.’s Competition and Markets Authority, which will now officially review the deal to determine if the merger should move forward.
First unveiled in April, IBM had planned to close its $6.4 billion acquisition of HashiCorp by the end of 2024.
However, on Dec. 30, the Competition and Markets Authority (CMA) watchdog agency launched a merger inquiry review into the acquisition to consider whether the deal will hurt competition in the U.K.
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“The CMA is investigating the anticipated acquisition by IBM of HashiCorp,” said the U.K. watchdog agency in an email to CRN regarding the matter.
The CMA is considering whether the deal will, “result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.”
What Comes Next?
For phase one of the review, the CMA is inviting “any interested party” to comment on the deal as it considers if the merger will harm competition in the United Kingdom.
The invitation for public comment closes on Jan. 16, 2025.
The deadline for CMA’s decision on potentially escalating the investigation further is February 25, 2025.
Both the company’s shareholders have approved the deal. Both companies did not respond to a request for comment on CMA’s investigation by press time.
IBM’s Plan For HashiCorp
IBM plans to spin HashiCorp into its software business rather than place it inside Red Hat.
IBM Chairman and CEO Arvind Krishna has said to expect more AI capabilities in HashiCorp cloud infrastructure automation tools once the acquisition is complete.
Red Hat Ansible working with HashiCorp Terraform “will simplify provisioning and configuration of applications across hybrid cloud environments,” Krishna said in July.
Approximately 20 percent of the Forbes Global 2000 are HashiCorp customers.
“HashiCorp, to us, is an accelerant for IBM strategy and for [IBM’s] software strategy. And Hashi helps in being offensive in terms of giving us an overall better portfolio so even more clients want to do business with us in the environment they are going to,” said Krishna last year.
