Mon. May 20th, 2019

IBM will acquire the Red Hat software company for $ 34 billion

1 min read

IBM Sunday said it would acquire Red Hat, best known for itsĀ  Red Hat Enterprise Linux operating system, for $ 34 billion including debt, as it seeks to diversify its technology hardware and its consulting business into higher margin products and services. Red Hat is an open source software company that gives away the source code of its main products. That means that anyone can download them for free.

An IBM statement strongly implicates the intention to act against Amazon’s dominance in the cloud computing environment, and says that companies are currently postponing adoption of cloud services because of the proprietary nature of the current cloud market.

Despite its dominance prior to Web 1.0, IBM has struggled for relevance in this era and has seen its share price fall by 30 percent in the last five years. It is clear that he is betting that a big acquisition can change that.

IBM made a bid of US $ 190 for each issued and outstanding portion of Red Hat, which was accepted: the current price remained at US $ 116. It is assumed that the acquisition will have to overcome many organizational obstacles before it is installed on the stone. If successful, Red Hat will be absorbed by the IBM Hybrid Cloud unit.

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