IBM has agreed to acquire Red Hat Inc. for 33,4 billions of dollars. IBM will go on the market because it is interested in boosting the cloud.
International Business Machines Corp. will pay 190 dollars per share in cash for Red Hat, a software development company based in North Carolina, according to a joint statement of companies today on Sunday.
"The acquisition of Red Hat is changing the game, changing everything about the cloud market," said Ginni Rometty, IBM President and CEO.
Rometty, 61, has been trying for years to direct a 107 company to more modern businesses such as cloud, artificial intelligence, and security software.
In the third quarter results, IBM disappointed investors who are looking for more progress after six years of decline in sales that had started earning 2018 earlier. So the Red Hat market will give IBM an immediate increase in its revenue from the cloud market as well as a number of highly reliable software products.
"We're going to magnify what Red Hat is doing deeper in many more businesses than they were able to have," Rometty told Bloomberg.
Revenue from Red Hat, which sells Linux-based software and services, is expected to exceed $ 3 billion for the first time this year as the company's Red Hat Enterprise Linux product attracts businesses from large customers. In the last quarter, the company reported a record 11 of over $ 5 million each and 73 of over $ 1 million, according to JMP Securities analyst Greg McDowell.
IBM promised to continue to increase the dividend and not to cut jobs after the deal.
So Red Hat makes IBM "a reliable player in the cloud now - both in the private and in the hybrid cloud," said Bloomberg Intelligence analyst Anurag Rana.
Goldman Sachs Group Inc. and JPMorgan Chase & Co. advised IBM on the agreement and financing.
"Knowing first hand how important open source hybrid technologies are and how much they help businesses, we want to bring these two companies together," said JPMorgan CEO Jamie Dimon.
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