The UK’s Competition and Markets Authority (CMA) has launched a merger inquiry into IBM’s acquisition of HashiCorp.
The CMA is considering whether the proposed merger will hurt competition in the affected industries in the UK. Comments from interested parties are invited by January 16, 2025. The deadline for the watchdog’s decision on taking things further is February 25, 2025, although the announcement might come earlier.
The CMA’s decision is unsurprising, although the timing is not ideal. In August, HashiCorp and IBM received a notification from the CMA that it intended to begin a Phase 1 review of the merger.
It’s not uncommon for the CMA to notify affected parties of an impending investigation [PDF], although the timescale suggests that there might be some complexities involved.
In particular, the CMA has been examining the UK’s cloud services market. In 2023, the UK’s telecommunications regulator Ofcom suggested that the country’s cloud market should be referred to the competition watchdog.
While much of the hot air during regulatory hearings has been generated by giants such as Microsoft and AWS pointing fingers at each other and protesting against remedies that might affect their businesses, it was somewhat inevitable that IBM’s decision to snap up cloud provisioning business HashiCorp would come under scrutiny from the authority.
In July, HashiCorp stated that the US Federal Trade Commission (FTC) would also be reviewing the acquisition, according to a filing made with the US Securities and Exchange Commission (SEC). The company’s shareholders also voted to approve the acquisition.
The deal was announced earlier in 2024. IBM intends to acquire HashiCorp for $6.4 billion and make the cloud infrastructure outfit part of its software business rather than fold it into Red Hat. The intention is for IBM’s customers to be able to make use of HashiCorp’s technology, such as Terraform, to manage their cloud estates better.
The hope then, and even as recently as HashiCorp’s HashiConf get-together in October, was that the deal would be closed by the end of 2024.
Two days remain in 2024, and the UK’s competition regulator has opened a merger inquiry.
The Register asked IBM and HashiCorp for their reaction to the launch of the merger inquiry, and will update this piece should either respond. ®
