IBM (International Business Machine) is acquiring the world-renowned provider of open source cloud software Red Hat, Inc., for a whopping $34 billion, the news about the deal was announced on Sunday.
IBM plans to pay $34 billion in cash for $190.00 per share. After the deal, Red Hat will join IBM’s Hybrid Cloud team while its CEO Jim Whitehurst will also join IBM’s senior management team and report to IBM chief Ginni Rometty who has marked the deal as “game changer.”
“The acquisition of Red Hat is a game-changer. It changes everything about the cloud market,” said Rometty.
“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, President, and CEO, Red Hat. “Joining forces with IBM will provide us with a greater level of scale, resources, and capabilities to accelerate the impact of open source as the basis for digital transformation and bring Red Hat to an even wider audience – all while preserving our unique culture and unwavering commitment to open source innovation.”
Started 25 years ago by Bob Young and Marc Ewing; Red Hat is now known for distributing and supporting Red Hat Enterprise Linux along with other cloud technologies.
For those unaware of Cloud services, Amazon Web Service (AWS), Google Cloud Platform, Microsoft Azure, Rackspace, and Dropbox are all Cloud services.
“IBM is committed to being an authentic multi-cloud provider, and we will prioritize the use of Red Hat technology across multiple clouds,” said Arvind Krishna, Senior Vice President, IBM Hybrid Cloud. “In doing so, IBM will support open source technology wherever it runs, allowing it to scale significantly within commercial settings around the world.”
A complete list of all IBM’s mergers and acquisitions is available here. Here, it is noteworthy that Red Hat’s acquisition will be the second major deal this year. On June 5th, Microsoft announced it bought GitHub for $7.5 billion.