IBM's HashiCorp Acquisition Approved by UK Regulators

IBM's Acquisition of HashiCorp Receives U.K. Antitrust Approval

The U.K.'s competition regulator has approved IBM’s proposed acquisition of HashiCorp, a significant infrastructure software company, for a multibillion-dollar sum.

CMA Clears the Deal

The Competition and Markets Authority (CMA) announced today that it has cleared the anticipated acquisition. A detailed explanation of the decision will be published shortly.

This approval arrives approximately ten months after IBM initially announced its intent to acquire HashiCorp for $6.4 billion. This move aims to strengthen IBM’s position in the hybrid cloud market.

Building on Previous Acquisitions

This acquisition builds upon IBM’s earlier investments, including the $34 billion purchase of Red Hat in 2019 and the $4.6 billion acquisition of Apptio in 2023.

Regulatory Scrutiny and Timeline

IBM initially anticipated closing the HashiCorp deal by the end of 2024. However, given the size of the transaction and the involvement of publicly traded companies, regulatory review was expected.

In December, the CMA initiated a “phase 1” investigation, soliciting feedback from relevant parties.

Shifting Regulatory Landscape in the U.K.

The U.K. has recently emphasized its commitment to being a pro-tech and pro-growth nation. This has led to changes within the CMA.

Last month, Doug Gurr, a former Amazon executive, was appointed as the new CMA chairperson. This appointment prompted concerns from smaller tech firms and non-profit organizations, who expressed their worries in an open letter regarding the CMA’s evolving direction.

U.K.'s Desire to Facilitate Business

Today’s decision reflects these changes. The U.K. aims to demonstrate its openness to business and avoid hindering international deals, even those involving companies based outside the country.

According to Tom Smith, a partner at Geradin Partners and former legal director at the CMA, “The British government recently signaled that it wants the CMA to be more careful about intervening in international deals where there is no special U.K. issue.” He added that it’s uncertain whether the outcome would have differed without this signal.

Remaining Regulatory Hurdles

While the U.K. has given its approval, the transaction is not yet finalized. The Federal Trade Commission (FTC) in the U.S. is also reviewing the deal, but has not yet issued a formal statement.