"Game Changing" Move by IBM the Largest Software Company Acquisition in Corporate History
IBM announced this weekend that it will acquire the shares of Red Hat (NASDAQ: RHT) at a $190, a 62.8% premium to their closing price of $116.68 in a $34 billion USD deal still subject to approval by regulators & stockholders. If closed successfully, the deal will represent the largest purchase price paid for a software company in history, topping the 2016 acquisition of LinkedIn by Microsoft for $26 billion USD. In initial comments on the merger, IBM CEO Ginni Rometty stated: “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.” Founded in 1994, Red Hat is one of the oldest and most widely used Linux distributions available for data centers today. Red Hat was the first open source software company to $500 million USD in annual revenue and is expected to surpass $3 billion in revenue in 2018. IBM gains the Red Hat Enterprise Linux codebase, programming talent, patents/IP, & goodwill, as well as the OpenShift, Kubernetes, OpenStack, JBoss, CoreOS, & Ansible resources. Red Hat has over 12,600 employees with corporate headquarters in Raleigh, North Carolina. As IBM is projecting cloud scale-out at the global level as a $1 trillion USD annual market, Red Hat's programming & engineering talent is already innovating at the highest levels of implementation for Fortune 500 corporations and provides an industry leading Linux product suite for data center management. This merger could have a major impact on the future of CentOS.