Cade approves IBM’s purchase of Red Hat for $ 34 billion

In July, the IBM reported having completed the purchase of Red Hat, a deal that had been announced in October 2018. However, the acquisition still needed to be approved by the Administrative Council for Economic Defense (Cade). Well, this Wednesday (13), the body gave its approval, no restrictions.

The deal was valued at $ 34 billion. Why was IBM willing to shell out such a large sum? Although Red Hat is often remembered for its open source software – such as Red Hat Enterprise Linux – the company is a powerhouse in cloud technologies.

IBM + Red Hat

Not by chance, Red Hat is expected to help IBM compete with other industry benchmarks, such as the Amazon Web Services platform.

In Cade’s understanding, the purchase of Red Hat by IBM may even result in some market concentration in specific segments, but not enough to cause “competitive concerns”, hence its endorsement.

Except that IBM almost got complicated in Brazil. Or it can be complicated: when announcing, in July, the conclusion of the deal even without Cade’s approval, the agency instituted an administrative procedure to check if the company committed a gun jumping act, when an acquisition is consummated without prior approval of regulatory authorities.

The procedure is still ongoing. If Cade concludes that there was gun jumping, IBM could pay a fine ranging from R $ 60,000 to R $ 60 million.

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