The U.K.’s antitrust regulator has approved IBM Corp.’s proposed acquisition of HashiCorp Inc. for $6.4 billion.

The Competition and Markets Authority, or CMA, announced the decision today. The regulatory milestone comes nearly a year after IBM first revealed plans to buy HashiCorp. Before closing, the transaction will also have to receive approval from the U.S. Federal Trade Commission.

HashiCorp develops source-available tools for managing information technology infrastructure. Its most well-known product, Terraform, automates the task of provisioning infrastructure resources such as cloud instances. It’s available alongside Nomad, a Kubernetes alternative that is easier to install and has a narrower feature set.

Developers configure both Terraform and Nomad using HashiCorp’s internally developed HCL syntax. It’s an alternative to standard programming languages that makes configuration files easier to read.

The company’s product portfolio also includes developer productivity tools. Packer is a platform for managing container images, software packages that contain applications. Another HashiCorp product called Waypoint provides a kind of app store through which developers can access container images and other technical resources. The company’s software lineup is rounded out by a trio of cybersecurity tools.

HashiCorp says that developers download its applications more than a half-billion times every year. The company generates revenue by selling paid versions that include additional features. During the three months ended Dec. 5, it generated $173.4 million in revenue from 4,856 customers. 

IBM announced its intent to acquire the company last April. Three years earlier, it spent $34 billion to buy Red Hat, another major player in the open-source ecosystem. Like HashiCorp, Red Hat provides software that eases infrastructure provisioning tasks. It also offers OpenShift, a Kubernetes distribution that automates many of the same infrastructure management tasks as Nomad. 

The Red Hat acquisition may have been one of the reasons the HashiCorp deal drew antitrust scrutiny. When two companies active in the same market merge, that market is left with one less supplier, which can lower competition. The CMA’s decision to clear the deal indicates that it doesn’t believe HashiCorp poses such concerns.

 “The CMA has cleared the anticipated acquisition by IBM of HashiCorp,” reads the brief announcement in which the regulator detailed its decision. “The full text of the decision will be published shortly.”

Last July, both IBM and HashiCorp disclosed that they had received second requests from the FTC. A second request is a regulatory tool that the agency uses to collect information for antitrust reviews. The deal will have to receive the FTC’s approval before closing. 

Photo: IBM