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HashiCorp, traded on NASDAQ as HCP, experienced a modest increase of 0.4% in its stock value, partially influenced by a report speculating an antitrust review related to its forthcoming acquisition by IBM, listed on NYSE.
The Department of Justice, a familiar party in scrutinizing IBM transactions, reportedly expressed no objections regarding the $6.4 billion merger with HashiCorp and was inclined to greenlight its closure, as per a recent CTFN disclosure citing insider sources.
However, complications arose with the Federal Trade Commission’s review timeline, prompting IBM to retract and refile its premerger notification last week to provide the FTC with additional assessment duration. The exact focus of the FTC investigation remains ambiguous, yet optimism prevails among sources regarding the avoidance of a prolonged scrutiny termed as the “second request”.
Recent reports by Capitol Forum unveiled the FTC’s apprehensions about potential impacts of reduced competition and innovation in the cloud software and encryption space post the HashiCorp acquisition. Specifically, FTC staff is examining the availability of alternative products for HashiCorp customers following the acquisition, with OpenTofu and OpenBao emerging as potential substitutes.
On June 12, HashiCorp’s stock surged by 1.1%, coinciding with comments from IBM during a Mizuho luncheon concerning the deal. IBM’s articulated views on the likelihood of antitrust clearance for the HashiCorp agreement post the refiled HSR notification buoyed market sentiments, traders reported to Seeking Alpha.
IBM’s acquisition offer for HashiCorp, priced at $35 per share in cash, was initially accepted in late April with anticipations for a smooth consolidation process.
