On December 7, 2025, we entered into the Merger Agreement. Completion of the Merger is subject to the satisfaction of certain conditions set forth in the Merger Agreement, including, but not limited to: (i) the adoption of the Merger Agreement by Confluent’s stockholders; (ii) the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, which waiting period expired at 11:59 p.m., Eastern Time, on January 12, 2026, and the obtainment, termination, or expiration, as applicable, of any approval or waiting period under the competition or foreign investment laws in certain foreign jurisdictions; (iii) the absence of any temporary restraining order, preliminary or permanent injunction, or other judgment or law issued by any court of competent jurisdiction or other governmental entity, in each case, preventing or materially restraining the consummation of the Merger or imposing, individually or in the aggregate, a Burdensome Condition (as defined in the Merger Agreement) (collectively, “Legal Restraint”), and no action or proceeding by a governmental entity before any court or certain other governmental entities of competent jurisdiction seeking to impose a Legal Restraint; (iv) the accuracy of the representations and warranties of the parties made in the Merger Agreement, subject to applicable materiality qualifiers; (v) the performance by each party of its covenants and agreements set forth in the Merger Agreement in all material respects; and (vi) no Material Adverse Effect (as defined in the Merger Agreement) having occurred with respect to Confluent, the existence or consequences of which are continuing. There is no assurance that these conditions to completion of the Merger will be satisfied before the Termination Date (as defined in the Merger Agreement) or at all, or that the Merger will be completed on the proposed terms, within the expected timeframe, or at all.
Additionally, the Merger may be delayed, and may ultimately not be completed, due to a number of factors, including failure to obtain any of the approvals, clearances or other conditions described in (i)-(vi) above.
If the Merger is not completed, we may suffer other consequences that could adversely affect our business, financial condition, results of operations and stock price, and our stockholders could be exposed to additional risks, including:
- to the extent the current market price of our Class A common stock reflects the assumption that the Merger will be completed, the market price of our Class A common stock could decrease if the Merger is not completed;
- investor confidence in us could decline, relationships with existing and prospective customers, suppliers, investors, lenders and other business partners may be adversely impacted and we may be unable to retain key personnel if the Merger is not completed;
- the attention of our management or employees may continue to be diverted in connection with the termination of the Merger or the Merger Agreement; and
- we will be required to pay IBM a termination fee under certain circumstances that give rise to the termination of the Merger Agreement.
Even if successfully completed, there are certain risks to our stockholders from the Merger, including:
- the amount of cash to be paid under the Merger Agreement is fixed and will not be increased to account for positive changes in our business, assets, liabilities, prospects, outlook, financial condition or operating results during the pendency of the Merger, including any successful execution of our current strategy as an independent company or in the event of any change in the market price of, analyst estimates of, or projections related to, our Class A common stock;
- receipt of the all-cash merger consideration under the Merger Agreement is taxable for U.S. federal income tax purposes and may be taxable for state, local and non-U.S. income tax purposes; and
- if the Merger is completed, our stockholders will forego the opportunity to realize the potential long-term value of the successful execution of our strategy as an independent company before the Merger.