The Competition and Markets Authority (CMA) in the United Kingdom has approved IBM’s acquisition of HashiCorp for $6.4 billion. The deal had raised antitrust concerns. IBM, one of the leading companies in the technology sector, had decided to acquire its rival HashiCorp last year to strengthen its hybrid cloud strategy. After lengthy discussions, the parties agreed on a $6.4 billion deal. While they aimed to close the deal by the end of 2024, in December, CMA initiated an investigation into the sale, leading to a prolonged process.

THIRD MAJOR ACQUISITION IN THE SAME SECTOR
IBM has long been continuing its strategy of acquiring software companies providing cloud-based services. The giant corporation had acquired Red Hat, a company offering services in this field, for $34 billion in 2019. Four years after that deal, in 2023, another significant player in the sector, Apptio, was also sold to IBM for nearly $5 billion. The recent acquisition of HashiCorp for $6.4 billion has caught the attention of competition authorities.

SERVICES PROVIDED BY HASHICORP
Established in the U.S. in 2012, software company HashiCorp offers tools and products that simplify cloud computing infrastructure provisioning, security, running, and connecting processes for its customers. Key tools and platforms used by industry leaders include Terraform, Packer, Vault, Consul, Nomad, and Waypoint. Major names from various sectors like Starbucks, Verizon, Epic Games, and Deutsche Bank are among HashiCorp’s clients.

HYBRID CLOUD STRATEGY DOMINATING THE INDUSTRY
IBM’s hybrid cloud strategy is an approach that allows businesses to securely distribute, run, and manage their data and applications. By combining both private and public cloud environments, this strategy aims 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 sector by acquiring companies offering similar services.

ONLY ONE APPROVAL LEFT TO BE OBTAINED
Although CMA has approved the acquisition, the U.S. Federal Trade Commission (FTC) has not yet made an official statement about the deal. Once FTC also gives its approval, IBM will formally integrate HashiCorp into its operations.