IBM strives to buy Red Hat for $ 34 billion
IBM will pay $ 190 per share for the software company, which it described as the world's leading open source cloud software provider, a more than 60% premium to the Red Hat $ 116.66 closing price on Friday. Shares traded up to $ 175 in June, but disappointing earnings combined with a volatile market had seen the price drop sharply.
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IBM (NYSE: IBM) and Red Hat (NYSE: RHT), the world's leading open source cloud software provider, announced today that the companies have reached a final agreement under which IBM will acquire all issued and outstanding ordinary shares in Red Hat for $ 1[ads1]90.00 per share in cash, representing a total business value of around $ 34 billion.
"The acquisition of Red Hat is a game exchange. It changes everything about the cloud market," said Ginni Rometty, IBM's chairman, president and CEO. "IBM is the world's first hybrid dealer and offers companies the only open cloud solution that will unlock the whole value of the cloud for its businesses.
"Most businesses today are only 20 percent along their sky travel, rent calculation power to cut costs," she said. "The next 80 percent are about unlocking real business value and driving growth." This is the next chapter of the cloud. It requires changing business applications for hybrid cloud, extraction of data and optimization of all parts of the business, from supply chains for sale. "
" Open Source is the standard choice for modern IT solutions, and I'm incredibly proud of the role of Red Hat has played in making it a reality in the business, "said Jim Whitehurst, CEO of Red Hat." Linking with IBM will give us greater scope, resources and capabilities to accelerate the open source effect as a basis for digital transformation and bring Red Hat to an even broader audience – all while retaining our unique culture and independent commitment to open source innovation. "
This acquisition brings together the best hybrid hybrid suppliers and will allow businesses to move all business applications to the cloud. Companies today already use more clouds, but research shows that 80 percent of workloads have not yet moved to the clock, retarded proprietary nature in today's cloud market. This prevents data and application transmissions across multiple clouds, data security in a multi-cloud environment and consistent cloud management.
IBM and Red Hat will be strongly positioned to solve this problem and accelerate hybrid multi-cloud adoption. Together, they will help customers create sky-native enterprise applications faster, drive greater portability and data and application security across multiple public and private clouds, along with consistent cloud management. They draw on their common leadership in key technologies, such as Linux, containers, K ubernetes, multi-cloud management and cloud management and automation.
IBM's and Red Hat's partnership has spread over 20 years, with IBM previously supported by Linux, collaborating with Red Hat to develop and grow Enterprise Linux, and recently bringing Enterprise Kubernetes and hybrid Cloud Solutions to customers. These innovations have become core technologies within IBM's $ 20 billion hybrid cloud business. Between them, IBM and Red Hat have contributed more to the open source community than any other organization.
"Today's announcement is the development of our long-term partnership," said Rometty. "This includes our Joint Hybrid Cloud Cooperation Announcement in May, a key precursor in our journey to this day."
With this acquisition, IBM will remain committed to Red Hat's open government, open source contributions, participation in the open source community and development model, and promote its widespread developmental ecosystem. In addition, IBM and Red Hat will be committed to the continued open source freedom, through such efforts as Patent Promise, GPL Cooperation Commitment, Open Invention Network and LOT Network.
IBM and Red Hat will also continue to build and improve Red Hat partnerships, including those with major shippers, such as Amazon Web Services, Microsoft Azure, Google Cloud, Alibaba and more, as well as IBM Cloud. At the same time, Red Hat will benefit from IBM's hybrid cloud and IT scale in helping to expand its open source technology portfolio to businesses globally.
"IBM is committed to being an authentic multi-cloud provider, and we will prioritize the use of Red Hat technology across multiple clouds," said Arvind Krishna, senior vice president of IBM Hybrid Cloud. "In that case, IBM will support open source technology wherever it goes, so it can scale significantly in commercial environments around the world."
At the end of the acquisition, Red Hat will join IBM's Hybrid Cloud team as a distinct entity, maintaining the independence and neutrality of Red Hat's open source development vs. commitment, current product portfolio and market strategy and unique development culture. Red Hat will continue to be led by Jim Whitehurst and Red Hat's current management team. Jim Whitehurst will also join IBM's senior management and report to Ginni Rometty. IBM intends to maintain Red Hat's headquarters, facilities, brands and practices.
"IBM's commitment to retaining the things that made Red Hat successful – always thinking about the customer and open source community first – makes this a great opportunity for not only Red Hat, but also open source more widely," said Paul Cormier, President, Products and Technologies, Red Hat. "Since the day we decided to bring open source to our business, our mission has remained unchanged. Now, one of the world's largest enterprise technology companies has agreed to work with us to scale and accelerate our efforts, providing open source innovation to an even greater part of the business. "