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Key Takeaways
- The Federal Trade Commission (FTC) has requested additional information into IBM’s planned $6.4 billion acquisition of cloud software maker HashiCorp.
- HashiCorp said Monday that the companies plan to “continue working cooperatively” with the FTC, and still expects the deal to close by the end of the year.
- The request is the latest in a series of investigative moves from the FTC into mergers and acquisitions over anticompetitive concerns.
The Federal Trade Commission (FTC) has made a “second request” for additional information around IBM’s (IBM) plan to acquire cloud software company HashiCorp (HCP) for $6.4 billion.
HashiCorp said Monday that it received the request last week, and the companies plan to “promptly respond to the Second Request and to continue working cooperatively with the FTC.” IBM and HashiCorp still expect the acquisition to be completed by the end of 2024, according to a filing with the Securities and Exchange Commission (SEC).
FTC Assessing Competitive Impacts of Deal
The FTC defines a “second request” as part of the deal monitoring process that “typically asks for business documents and data that will inform the agency about the company’s products or services, market conditions where the company does business, and the likely competitive effects of the merger.”
HashiCorp did not disclose what information or documents the agency requested, but the review suggests the FTC could have concerns about whether the acquisition would be harmful to competition in the cloud computing space.
The deal was originally announced in April, with the sides also stating at the time that it was expected to close by the end of 2024. IBM said in announcing the deal that it was the next step in the company’s “deep focus and investment in hybrid cloud and AI.”
Latest in String of FTC Investigative Moves
Under the Biden administration, the FTC has stepped up its enforcement efforts, taking a more stringent approach to antitrust policy under Chair Lina Khan.
Energy giants Marathon Oil (MRO) and ConocoPhillips (COP) said Friday that they had recently received a second request from the FTC over a deal announced in May that would see ConocoPhillips pay $22.5 billion to acquire Marathon.
IBM shares were up less than 1% at $184.35 as of about 11:45 a.m. ET Monday. HashiCorp stock was down less than 1% as $33.44.