GEC NEWS WIREIBM is acquiring Red Hat in a deal valued around $34 billion, the companies revealed. IBM will pay $190 per share for the software company, a more than 60% premium to Red Hat’s closing stock price of $116.68 on Friday.
The transaction is by far IBM’s biggest acquisition. It underscores IBM Chief Executive Ginni Rometty’s efforts to expand the company’s subscription-based software offerings, as it faces slowing software sales and waning demand for mainframe servers.
Founded 25 years ago, Red Hat specializes in Linux operating systems, the most popular type of open-source software, which was developed as an alternative to proprietary software made by Microsoft Corp.
For IBM, Red Hat’s Linux and other software assets represent an opportunity to sell products to corporate software developers who are building complex applications that can run on both cloud-computing platforms such as Amazon and Microsoft as well as in-house data centers.
