IBM announced Sunday it would acquire Linux specialist Red Hat in a deal valued at $34 billion in cash and debt. IBM agreed to acquire Red Hat for $190 per share in cash. The total value of the deal is approximately $34 billion, making this the biggest Linux or open-source business deal ever. Red Hat is the leading corporate Linux company. Prior to this deal, Red Hat had a market capitalization of about $20.5 billion.
IBM CEO Ginni Rometty focused on the cloud benefits of IBM acquiring Red Hat rather than Linux and in s statement that:
“The acquisition of Red Hat is a game-changer. It changes everything about the cloud market. IBM will become the world’s number one hybrid cloud provider, offering companies the only open cloud solution that will unlock the full value of the cloud for their businesses.”
Old partners
Red Hat and IBM have had a business partnership of over 20 years. IBM with its policy to support open course code has been a supporter of Linux for a while now. One of the major motives behind IBM’s acquisition is to bring the hybrid cloud solution to the customers. These innovations have been a major contributor to IBM’s 19 billion hybrid cloud business. Both IBM and Red Hat have contributed the most to open source community.
Commitment to Open source community
“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,” said Jim Whitehurst, Red Hat’s CEO.
With this acquisition, IBM will remain committed to Red Hat’s open governance, open source contributions, participation in the open source community and development model, and fostering its widespread developer ecosystem. In addition, IBM and Red Hat will remain committed to the continued freedom of open source, via such efforts as Patent Promise, GPL
Cooperation Commitment, the Open Invention Network, and the LOT Network.
If this Acquisition proceeds then it will be the biggest Software Acquisition to date.
- $34 billion (pending) – IBM computers buys open source software provider Red Hat in 2018
- $26.2 billion – Software company Microsoft buys professional social network LinkedIn in 2016
- $22 billion – Social network Facebook buys messaging app WhatsApp in 2014
- $13.5 billion – Security software maker Symantec buys storage management software maker Veritas in 2004 ($18 billion adjusted for inflation)
- $11 billion – Database company Oracle buys human resources software company PeopleSoft in 2004 ($14.7 billion adjusted for inflation)
