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FTC Requests More Information on $6.4B IBM Planned Acquisition of HashiCorp

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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% at $33.44.

T-Mobile to Acquire U.S. Cellular for $4.4 Billion to Enhance Rural Service

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T-Mobile announced on Tuesday that it will acquire the wireless operations of U.S. Cellular for $4.4 billion, a strategic move aimed at enhancing service in rural areas. This acquisition, set to close next year, will add approximately four million new customers to T-Mobile’s base. Despite the sale, U.S. Cellular will retain about 70% of its wireless spectrum licenses and cell towers. The merger is seen as a response to an increasingly consolidated mobile market. T-Mobile CEO Mike Sievert stated, “As customers from both companies will get more coverage and more capacity from our combined footprint, our competitors will be forced to keep up—and even more consumers will benefit.” U.S. Cellular’s Board Chair, LeRoy T. Carlson, Jr., emphasized the need for scale and investment to remain competitive, citing the benefits of integrating their operations with T-Mobile. This move follows T-Mobile’s recent acquisitions, including the $1.35 billion purchase of Ka’ena Corporation, the parent company of Mint Mobile and Ultra Mobile, which was approved by the Federal Communications Commission (FCC) last month. T-Mobile also merged with Sprint in 2020. However, T-Mobile’s expansion efforts come amid heightened antitrust scrutiny. The Federal Trade Commission (FTC) and the Department of Justice (DOJ) have been increasingly vigilant, challenging numerous mergers last year. The revised merger guidelines released six months ago reflect this rigorous oversight. Whether the acquisition of U.S. Cellular will face significant regulatory hurdles remains to be seen.