IBM Under Scrutiny as CMA Launches HashiCorp Acquisition Inquiry
Deal News | Dec 31, 2024 | EIN
The UK's Competition and Markets Authority (CMA) has commenced an inquiry into IBM's acquisition of HashiCorp to investigate its potential impact on market competition within the UK. IBM plans to acquire HashiCorp for $6.4 billion, integrating its cloud infrastructure into IBM's broader software business rather than into Red Hat. The CMA's involvement, announced in August 2024, follows expectations set by the UK telecommunications regulator Ofcom. It deemed necessary to examine the competitive dynamics of the cloud services market post-merger. The inquiry is part of the first phase of the merger review, with comments from stakeholders invited until mid-January 2025 and a decision due by February 25, 2025. While the US Federal Trade Commission (FTC) also plans a review, HashiCorp shareholders have approved the deal. IBM aims to leverage HashiCorp's solutions, like Terraform, to enhance cloud management capabilities for its customers.
Sectors
- Cloud Computing
- Regulatory Affairs
Geography
- United Kingdom – The CMA, a UK regulatory body, has initiated an inquiry into the acquisition, indicating that the transaction could affect the UK market.
- United States – Both IBM and HashiCorp are based in the USA, and the FTC has also been notified of the acquisition for regulatory review.
Industry
- Cloud Computing – The article discusses IBM's acquisition of HashiCorp, a cloud infrastructure company, which involves significant implications for the cloud services sector.
- Regulatory Affairs – The UK's CMA is investigating the acquisition to ensure it does not negatively impact competition, highlighting the regulatory aspect of the transaction.
Financials
- $6.4 billion – The proposed acquisition price for IBM to acquire HashiCorp.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| IBM | Bidding Company | Company | A multinational technology corporation looking to acquire HashiCorp to enhance its software business capabilities. |
| HashiCorp | Target Company | Company | A cloud infrastructure company known for products like Terraform, which IBM aims to acquire. |
| Competition and Markets Authority (CMA) | Regulatory Authority | Government | UK body responsible for ensuring fair competition, currently investigating the IBM-HashiCorp deal. |
| Federal Trade Commission (FTC) | Regulatory Authority | Government | US regulatory body also notified about the acquisition for antitrust review. |
| Ofcom | Telecommunications Regulator | Government | UK telecommunications regulator that recommended review of the cloud services market competition. |