IBM Corporation has announced that it’ll be acquiring Red Hat Inc., the world’s leading open-source enterprise software maker for $34 billion. As part of the all-cash deal, IBM will buy all of Red Hat’s issued and outstanding common shares at a price of $190 per share.
Through the acquisition, IBM hopes to provide best-in-class hybrid cloud infrastructure that will enable companies to securely move all business applications to the cloud. In collaboration with Red Hat, the company will help clients create cloud-native business applications, as well as drive increased portability and security of data across multiple public and private cloud infrastructures.
“The acquisition of Red Hat is a game-changer. It changes everything about the cloud market. Most companies today are only 20-percent along their cloud journey, renting compute power to cut costs. The next 80-percent is about unlocking real business value and driving growth. This is the next chapter of the cloud. It requires shifting business applications to hybrid cloud, extracting more data and optimizing every part of the business, from supply chains to sales,” Gini Rometty, IBM’s Chairwoman, President, and CEO, was quoted as saying in the official press release.
“Open source is the default choice for modern IT solutions, and I’m incredibly proud of the role Red Hat has played in making that a reality in the enterprise. Joining forces with IBM will provide us with a greater level of scale, resources and capabilities to accelerate the impact of open source as the basis of digital transformation and bring Red Hat to an even wider audience – all while preserving our unique culture and unwavering commitment to open source innovation,” said Red Hat’s President and CEO Jim Whitehurst.
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Upon completion of the acquisition, Red Hat will become part of IBM’s Hybrid Cloud team and continue to operate as a distinct unit.