The FTC is taking a close look at IBM's acquisition of HashiCorp, according to a filing made to America's financial watchdog.

The SEC filing was made by HashiCorp, which says it and IBM "each received a request for additional information and documentary material (the 'Second Request') from the Federal Trade Commission in connection with the FTC's review of the merger." HashiCorp hopes the acquisition will be finalized by the end of the year.

The Register reached out to IBM and HashiCorp for further info, and both said they had nothing to add beyond what was said in the SEC filing.

The probe may be at least partly down to HashiCorp's Terraform configuration management software for business cloud customers. It's currently the most used in the market, just ahead of Ansible by Red Hat, an IBM subsidiary.

It's not as if Terraform is an unchallenged juggernaut. HashiCorp's move to switch Terraform from open source to so-called business source in August last year has not been entirely successful so far. Terraform users may have to pay the software biz to obtain a commercial license to use the code, something that's technically good for HashiCorp on paper.

However, not everyone has been willing to pay up for Terraform, prompting the creation of forks from older, open source versions of the code such as OpenTofu, which has the support of the Linux Foundation.

On the other hand, that the acquisition costs $6.4 billion might be all the motivation the federal agency needs to do some due diligence.

Meanwhile, it's not entirely clear if IBM made the right decision to pay as much as it did for HashiCorp. The market reacted very negatively when Big Blue announced its acquisition back in April, and the stock price has only just now recovered back to where it was pre-announcement. If IBM felt it needed to own Terraform, it could have just adopted one of the open source forks or made its own fork.

The FTC's probe also isn't the first legal skirmish around the IBM-HashiCorp acquisition. A HashiCorp shareholder sued the company and claimed that the buyout was engineered to benefit the software firm's board members. Though, the lawsuit was withdrawn just two days later; it's unlikely the FTC's investigation will conclude in a similar amount of time. ®

https://www.theregister.com//2024/07/15/ftc_ibms_hashicorp/