HashiCorp faces increased regulatory scrutiny over its acquisition by IBM, causing its shares to drop about 1% on Thursday. The FTC is conducting a review of IBM’s planned $6.4 billion acquisition of HashiCorp, focusing on potential competition concerns in the cloud software and encryption tools sectors. Despite the uncertainty, IBM expects the transaction to close by the end of 2024.
IBM announced its intention to acquire HashiCorp for $35 per share in cash in April to support its shift to a hybrid cloud and AI-focused business model. The deal is expected to expand IBM’s market and increase margins. Analysts see merger risks and uncertainty surrounding the acquisition, with a Hold consensus rating on HCP stock. The average price target for HCP stock is $34.33, suggesting a potential upside of 3.16% from current levels.
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