IBM Acquires Shares of Hybrid Cloud Tech Provider Red Hat For $34 Billion

IBM (NYSE: IBM) announced on Tuesday it has acquired all of the issued and outstanding common shares of open hybrid cloud technologies provider Red Hat for $190 per share in cash, which represents equity value of approximately $34 billion. IBM reported that the acquisition it and Red Hat will accelerate innovation by offering a next-generation hybrid multi-cloud platform.

“Based on open source technologies, such as Linux and Kubernetes, the platform will allow businesses to securely deploy, run and manage data and applications on-premises and on private and multiple public clouds.”

Speaking about the acquisition, Ginni Rometty, IBM Chairman, President and CEO, stated:

“Businesses are starting the next chapter of their digital reinventions, modernizing infrastructure and moving mission-critical workloads across private clouds and multiple clouds from multiple vendors. They need open, flexible technology to manage these hybrid multicloud environments. And they need partners they can trust to manage and secure these systems. IBM and Red Hat are uniquely suited to meet these needs. As the leading hybrid cloud provider, we will help clients forge the technology foundations of their business for decades to come.”

Jim Whitehurst, President and CEO, Red Hat, also commented:

“When we talk to customers, their challenges are clear: They need to move faster and differentiate through technology. They want to build more collaborative cultures, and they need solutions that give them the flexibility to build and deploy any app or workload, anywhere. We think open source has become the de facto standard in technology because it enables these solutions. Joining forces with IBM gives Red Hat the opportunity to bring more open source innovation to an even broader range of organizations and will enable us to scale to meet the need for hybrid cloud solutions that deliver true choice and agility.”

IBM then noted that Red Hat will continue to be led by Whitehurst and its current management team. Whitehurst is joining IBM’s senior management team, reporting to Ginni Rometty. IBM then added it will maintain Red Hat’s headquarters in Raleigh, North Carolina, its facilities, brands, and practices.

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