The United Kingdom Competition and Markets Authority (CMA) has approved IBM’s acquisition of HashiCorp for $6.4 billion. The deal had raised antitrust concerns. IBM, one of the technology sector’s leading companies, decided to acquire rival HashiCorp last year to strengthen its hybrid cloud strategy. After lengthy negotiations, the parties agreed on a $6.4 billion deal. Although they aimed to close the deal by the end of 2024, in December, CMA decided to launch an investigation into the sale, extending the process. THIRD LARGEST ACQUISITION FROM THE SAME SECTOR IBM has long been pursuing a strategy of acquiring software companies that offer cloud-based services. The giant company acquired Red Hat, a company providing services in this field, for $34 billion in 2019. Four years after this deal, in 2023, another major player in the sector, Apptio, was also sold to IBM for nearly $5 billion. Finally, the agreement to acquire HashiCorp for $6.4 billion also spurred competition authorities into action. WHERE DOES HASHICORP PROVIDE SERVICES? Founded in the US in 2012, software company HashiCorp offers tools and products that facilitate cloud computing infrastructure provisioning, securing, running, and connecting processes for its customers. Leading industry tools and platforms used by Terraform, Packer, Vault, Consul, Nomad, and Waypoint are at the forefront. Major names in different sectors such as Starbucks, Verizon, Epic Games, and Deutsche Bank are among HashiCorp’s customers. HYBRID CLOUD STRATEGY DOMINATING THE INDUSTRY
IBM’s hybrid cloud strategy is an approach that enables businesses to securely distribute, run, and manage their data and applications. This strategy aims to merge private and public cloud environments to create a flexible and scalable IT infrastructure. IBM, aiming to accelerate businesses’ digital transformation processes and help them gain a competitive advantage, has significantly strengthened its position in the industry by acquiring companies that provide similar services. ONLY ONE APPROVAL PENDING If CMA approves the acquisition, the US Federal Trade Commission (FTC) has not officially commented on the deal yet. Once the FTC also approves, IBM will officially integrate HashiCorp into its operations.