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IBM is acquiring software company Red Hat for $34 billion

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IBM and Red Hat announced that the companies have reached a definitive agreement under which IBM will acquire all of the issued and outstanding common shares of Red Hat for $190.00 per share in cash, representing a total enterprise value of approximately $34 billion.

Founded in 1993, Red Hat specializes in Linux operating systems and is the world’s leading provider of open source cloud software.

“IBM will become the world’s #1 hybrid cloud provider, offering companies the only open cloud solution that will unlock the full value of the cloud for their businesses,” IBM Chief Executive Ginni Rometty [source]

  • Red Hat charges fees to its corporate customers for custom features, maintenance and technical support, offering IBM a lucrative source of subscription revenue
  • Red Hat is one of the very few companies in the cloud computing sector that has both revenue growth and free cash flow [source]

“This acquisition we are clearly doing for growth synergies. This is not about cost synergies at all”, Ginni Rometty for Reuters

Red Hat is expected to bring 3 things to IBM: the world’s largest portfolio of open source technology, their innovative hybrid cloud platform, and a vast open source developer community.

Big expectations? Sure, and that’s because this is Big Blue’s biggest deal in its 107 years.

Daniel Marton

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Daniel Marton

After 3 years as a radio reporter (back in 2003), Daniel has experienced some other options that media can offer: 2 years as a special reporter (print), 2 years as a news commentator (tv), 2 years as an editor-in-chief (online) plus another 5 years as an online manager (digital). Since 2016, he is a freelance journalist, delivering documented articles and creative ideas for any kind of media. Ever since then, Daniel joined the iCEE.fest family, as a contributing editor for iCEE.news.

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