IBM agreed to acquire software maker Red Hat for US$33.4 billion in the biggest-ever acquisition for the computer-services giant.
International Business Machines will pay US$190 per share in cash for Raleigh, North Carolina-based Red Hat, according to a statement from the companies Sunday, October 28, confirming an earlier Bloomberg News report.
“The acquisition of Red Hat is a game-changer. It changes everything about the cloud market,” said Ginni Rometty, IBM’s chairman and CEO, in the statement.
Revenue at Red Hat, which sells software and services based on the open source Linux operating system, is expected to top US$3 billion for the first time this year as the company’s Red Hat Enterprise Linux product attracts business from large customers. Last quarter the company reported a record 11 contracts valued at over US$5 million each and 73 over US$1 million, according to a note from JMP Securities analyst Greg McDowell.