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IBM To Acquire Red Hat

In one of the most significant tech acquisition of 2018 IBM to acquire Red Hat in a $34 billion Deal! The Red Hat acquisition is by far IBM’s largest deal ever. And the Deal is one of the biggest in the History of (U.S.) Technology, only the AOL-Time Warner merger, the Dell and EMC merger, and the JDS Uniphase’s acquisition of SDL where bigger.

With this Deal Big Blue bets big on (Hybrid) Cloud and Open Source.

“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." Ginni Rometty, IBM Chairman, President and Chief Executive Officer

Here are a few facts from the joint statement:

  • Acquisition will be free cash flow and gross margin accretive within 12 months, accelerate revenue growth and support a solid and growing dividend
  • IBM to maintain Red Hat’s open source innovation legacy, scaling its vast technology portfolio and empowering its widespread developer community
  • Red Hat to operate as a distinct unit within IBM’s Hybrid Cloud team

This Deal makes all the other big Technology Deals look tiny:

Will be interesting to see what happens to Red Hat and how the community reacts. For Red Hat share owners (Hint: I have a few since the IPO), the $190 per share is a nice value!