RESEARCH TRIANGLE PARK – The Government of Brazil has revoked its regulatory approval of the $34 billion merger between IBM and Red Hat, slowing down at least for the moment the momentum toward closing of the deal.
“Brazil’s Administrative Council for Economic Defense (Cade) revoked the decision taken by the General Superintendence of the body clearing the takeover of Red Hat by IBM,” reported industry publication Telecompaper.
Bloomberg Law published a similar story.
Brazil revocation of IBM-Red Hat deal approval likely to delay closing, attorney says
Citing information from Valor Economico, Telecompaper reported Friday that the deal had to be reassessed again “to evaluate the implications of IBM’s increased market power after the transaction, which would result in vertical overlaps in the market.”
Brazil had approved the deal earlier this week.
“Decision was made during session June 26, when the head of antitrust regulator Alexandre Barreto said the full board of Cade will review the case due to competition concerns,” Bloomberg Law said.
The European Union gave its blessing to the merger on Thursday “without restrictions.”
The US Justice Department also had approved the deal in May.
Red Hat millionaires: Watch for workers to cash out if IBM’s $34B acquisition wins approval
“Previously, Cade’s General Superintendence had approved the acquisition without imposing restrictions, as it considered that prices to end-users would not be adversely affected and that there would be no competitive concerns in the software market,” Telecompaper said.
Valor Economico is the largest economic-focused news publication in Brazil.
