The UK’s Competition and Markets Authority (CMA) has launched a formal review of IBM’s proposed $6.4 billion acquisition of cloud software provider HashiCorp. The investigation aims to assess whether the deal could harm competition in the cloud and AI sectors.
As The Wall Street Journal reports, the acquisition, announced in April, the acquisition would significantly expand IBM’s cloud computing and artificial intelligence portfolio. HashiCorp, based in San Francisco and founded in 2012 by Mitchell Hashimoto and Armon Dadgar, offers tools that help businesses manage cloud infrastructure and security. The company boasts a customer base of approximately 4,400 organizations.
The CMA has invited interested parties to submit comments on the merger by January 16, with a provisional decision deadline set for February 25. Depending on its findings, the CMA could either approve the deal or escalate it to a more detailed investigation.
This review adds to the scrutiny IBM is already facing from the U.S. Federal Trade Commission, which is conducting a parallel investigation. Regulators are likely examining the potential impact of the merger on innovation and market competition, as IBM continues to bolster its cloud and AI capabilities through strategic acquisitions.
The outcome of these investigations will determine whether IBM can proceed with integrating HashiCorp’s offerings into its broader strategy, marking another pivotal moment in the competitive landscape of cloud computing.
Featured Image courtesy of Yves Herman/REUTERS
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