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IBM Acquires Linux Giant Red Hat for $34 Billion

In one of the most expensive acquisitions in history, IBM has acquired Linux giant Red Hat in a deal that is valued at some $34 billion.  The deal, which will have to clear regulators, has IBM paying $190 per share of Red Hat stock and will likely close at some point in mid-2019.

“The acquisition of Red Hat is a game-changer. It changes everything about the cloud market,” said Ginni Rometty, IBM Chairman, President and Chief Executive Officer. “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.

Once acquired, the company will be treated as a distinct unit with IBM’s Hybrid Cloud group and will bring with it the Linux company’s OpenShift Platform-as-a-Service (PaaS) solution which competes against the likes of Google’s App Engine.  IBM will also get all of the heavy investment the company  has made in the past few years in server-less computing, containers, and other enterprise grade solutions.  This is a significant acquisition for IBM.

Both IBM and Red Hat are committed to remaining open source and they both understand that remaining so will be key to the long term success of IBM.

“IBM’s commitment to keeping the things that have made Red Hat successful – always thinking about the customer and the open source community first – make this a tremendous opportunity for not only Red Hat but also open source more broadly,” said Paul Cormier, President, Products and Technologies, Red Hat.

IBM also stated that they have been working with the company for going on two decades on an enterprise class version of Linux.  Ultimately all of this means that those who love Red Hat won’t have their platform disappear.  Indeed, if anything, it is likely to greatly expand thanks to the financial backing of IBM.

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