Redhat, the open source business which began with Red Hat Linux, have agreed a $34 billion deal to be acquired by IBM.
UPDATE: IBM Stock price has fallen since the acquisition announcement On 26th October, the IBM share price was $131.64, the merger brought it to $119.36 and it is currently trading at 118.77. A market analyst, Joel Fishbein (BTIG) says “IBM’s $34 billion acquisition of Red Hat is a last-ditch effort by IBM to play catch-up in the cloud industry.” (read the article at CNBC).
IBM (NYSE:IBM) and Red Hat (NYSE:RHT), announced today (29 October 2018) that the companies have reached a definitive agreement under which IBM will acquire all of the issued and outstanding common shares of Red Hat for $190.00 per share in cash, representing a total enterprise value of approximately $34 billion.-RedHat
This is big news for both IBM and Red Hat. IBM haven’t exactly been winning the war in the cloud sector, and have arguably been losing relevance in modern IT. Many feel that IBM ‘missed’ the cloud, when Amazon started out with AWS.
For those of you that may have concerns about Red Hat’s future, IBM have stated that Red Hat will join IBM’s Hybrid Cloud team as a distinct unit. However they will apparently will be “preserving the independence and neutrality of Red Hat’s open source development heritage and commitment, current product portfolio and go-to-market strategy, and unique development culture”.
Apparently, IBM will remain committed to Red Hat’s open governance, open source contributions, participation in the open source community and development model, and fostering its widespread developer ecosystem.
IBM and Red Hat also will continue to build and enhance Red Hat partnerships, including those with major cloud providers, such as Amazon Web Services, Microsoft Azure, Google Cloud, Alibaba and more, in addition to the IBM Cloud.
Red Hat will continue to be led by Jim Whitehurst and Red Hat’s current management team. Jim Whitehurst also will join IBM’s senior management team and report to Ginni Rometty. IBM intends to maintain Red Hat’s headquarters, facilities, brands and practices.
“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”Ginni Rometty, IBM chairman and CEO.
“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”.Jim Whitehurst, president and CEO of Red Hat.