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BREAKING: IBM Acquires Red Hat for $34 Billion

BREAKING: IBM Acquires Red Hat for $34 Billion 

Open source projects is really making it big in the past 2 years. First it was Microsoft buying GitHub for $7.5 billion. SUSE Enterprise Linux was sold for $2.5 billion. 2 days ago IBM announced that it is buying Red Hat for approximately $34 billion.

Red Hat, is the first billion dollar open source company and one of the strongest players in the cloud computing game. IBM has been lagging behind the likes of Microsoft and Google in the trillion dollar cloud market. So to strengthen their position in this field, IBM is acquiring Red Hat.

IBM will acquire all of the issued and outstanding common shares of Red Hat for $190.00 per share in cash, which is approximately $34 billion.

The deal was facilitated by JPMorga, senior partner in the from IBM Network and Guggenheim Partners from Red Hat side.

Red Hat will join IBM’s Hybrid Cloud team as a distinct unit. It will continue to be led by Jim Whitehurst and the current Red Hat management team.

Ginni Rometty, IBM Chairman, President and Chief Executive Officer gave a speech saying

“The acquisition of Red Hat is a game-changer. It changes everything about the cloud market. 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.”

Red Hat is obviously excited about the deal:

Jim Whitehurst, President and CEO, Red Hat says;

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


As per the announcement, “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”. In addition, IBM and Red Hat will remain committed to the continued freedom of open source, via such efforts as Patent Promise, GPL Cooperation Commitment, the Open Invention Network and the LOT Network.”


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