IBM has confirmed its plans to acquire cloud software business, Red Hat for $34 billion in cash and debt. The deal will be the largest-ever software acquisition.
IBM eclipsed Microsoft’s $26.2 billion acquisition of LinkedIn, this is the biggest software acquisition in history. It’s not the biggest tech acquisition ever, though, as that title belongs to Dell’s $67 billion buyouts of data storage business EMC.
Red Hat is best known for its Red Hat Enterprise Linux operating system. The open source software company has given the source code for its core products.
According to IBM, the deal has already been approved by the boards of directors of both IBM and Red Hat but is still subject to Red Hat shareholder and regulatory approvals. If all goes as planned, the acquisition is expected to close in the latter half of 2019.
“The acquisition of Red Hat is a game-changer. It changes everything about the cloud market,” said Ginni Rometty, IBM Chairman, President and Chief Executive Officer stated. “IBM will become the world’s number-one hybrid cloud provider, offering companies the only open cloud solution that will unlock the full value of the cloud for their businesses.”