IBM acquires Red Hat

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IBM announced its intent to acquire Linux’s Red Hat for the handsome sum of $34 billion. Red Hat, started in 1994, made a name for itself with its eponymous Linux distribution which was widely used until its phase-out in 2004. With the Red Hat Enterprise Linux distribution, the company focused on its corporate market while redirecting its general audience to Fedora, a crowd-sourced distribution model that received Red Hat support. For years, Red Hat has positioned itself as a key player in the business of software and tools for servers and cloud computing. This is what IBM aims to acquire, to beef up its cloud-computing product line in competition with the two heavyweights in the ring, Amazon (AWS) and Microsoft (Azure). IBM made an offer of $190 per issued and outstanding Red Hat share. Red Hat stock closed at $116.68 on Friday before the sale was announced. If it comes to term, this transaction will be the third largest in US tech history (behind the merger-acquisition of Dell and AMC for $67 billion and JDS Uniphase’s purchase of SDL optical components for $41 billion). Red Hat will become a standalone business unit within the Hybrid Cloud division. A bold move for the venerable International Business Machines Corporation.

⇨ The Register, “Official: IBM to gobble Red Hat for $34bn – yes, the enterprise Linux biz.”

⇨ Ars Technica, “This is fine: IBM acquires Red Hat.”