IBM completes purchase of Red Hat for $ 34 billion | Business

Now there’s no turning back: IBM completed this Tuesday (9) the acquisition of Red Hat for $ 34 billion. The deal was announced in October 2018 and, since then, has had to be endorsed by shareholders and market regulators.

IBM + Red Hat

Although it is often remembered for its open source software – notably Red Hat Enterprise Linux – the company was bought by IBM for being a powerhouse in cloud solutions.

Not by chance, IBM confirmed that the newly acquired will integrate its hybrid cloud division (which combines local systems with clouds), but without losing autonomy: Red Hat will continue as an independent unit, therefore, its brand and products will be maintained. Your open source-based software will also be preserved.

For those who know the backstage of both companies, the acquisition is not surprising. IBM and Red Hat have been operating and business partnerships for many years. It is not uncommon to find servers based on IBM solutions, but which run Red Hat Enterprise Linux, for example.

The $ 34 billion disbursed by IBM ($ 190 per share) corresponds to the largest acquisition ever made by the company – and one of the largest in the technology sector.

IBM servers

That amount is impressive, but in its announcements, IBM tries to demonstrate that it knows what it is doing. The expectation is that Red Hat will help it face other giants in the sector, such as the Amazon Web Services platform.

But the strategy here is different. While Amazon prioritizes applications entirely based on clouds, IBM wants to serve large companies that have or want to have cloud platforms, but need to maintain local legacy systems.

In IBM’s understanding, the combination of its solutions with those of Red Hat will be able to leave both in a prominent position in this market. For Ginni Rometty, CEO of IBM, “the hybrid cloud is not a temporary destination, it is the destination”.

In Brazil, the acquisition of Red Hat by IBM was not approved by Cade, but the deal is yet to be put on trial in the council’s plenary.

Update on 10/07/2019: in a note sent to Tecnoblog, IBM pointed out that Cade issued an unconditional release position on the acquisition and claims to be “confident that the ongoing process will not change that decision”.

With information: Fortune.

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