IBM acquired software company Red Hat for USD 34 billion

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IBM had agreed to acquire U.S. software company Red Hat Inc for USD 34 billion, including debt.The objective behind the acquisition is to become the world’s no. 1 hybrid cloud provider.

It will be by far IBM’s biggest acquisition. This MOU would diversify its technology hardware and consulting business into higher-margin products and services.

The deal between IBM and Red Hat is expected to close in the second half of 2019.Also, Red Hat would continue to be led by Red Hat CEO Jim Whitehurst and Red Hat’s current management team.

Red Hat specializes in Linux operating systems, the most popular type of open-source software and would operate as a distinct unit within IBM’s Hybrid Cloud team.

IBM was founded in 1911 and is known in the technology industry as Big Blue, a reference to its once ubiquitous blue computers. It has faced years of revenue declines, as it transitions its legacy computer maker business into new technology products and services. Its recent initiatives have included artificial intelligence and business lines around Watson, named after the supercomputer it developed.