IBM recently announced that it has completed the acquisition of Red Hat for $34 billion in an effort to boost its cloud business, several media reports said. The Red Hat acquisition will firm up IBM’s position as the leader in hybrid cloud. IBM purchased all of Red Hat’s issued and outstanding common shares for $190 per share.
Red Hat is an American multinational software company headquartered in Raleigh. Red Hat and IBM have worked together for more than 20 years to bring open source as the default option for modern IT solutions. Its open hybrid cloud technologies coupled with IBM’s industry experience will drive innovation by offering a next-generation hybrid multi cloud platform, an official press release said.
IBM will retain Red Hat’s headquarters in Raleigh in addition to its brands and practices. Ginni Rometty, IBM chairman, president and CEO, said, “Businesses are starting the next chapter of their digital reinventions, modernising infrastructure, and moving mission-critical workloads across private clouds and multiple clouds from multiple vendors.”
IBM’s cloud revenue in the 12 months through the first quarter of this year reached more than $19 billion. The company’s revenue has grown exponentially by 25 percent since 2013. That said, Red Hat’s revenue for fiscal year 2019 stood at $3.4 billion, with a 15 percent increase year-on-year. “As a long-standing partner of Red Hat and IBM, we look forward to capabilities that these two companies will bring together,” said Michael Poser, Managing Director and Chief Information Officer, Enterprise Technology & Services, Morgan Stanley.