Originally German, SUSE is now owned by Swedish investment company EQT and officially based in Luxembourg. A complex, yet European affair. But now EQT is considering selling SUSE. Is a takeover by a non-European company on the cards, and what would the consequences be?
Sovereignty is a hot topic, and fears about American interference in Europe’s IT infrastructure are omnipresent. Technology, complex as ever, is an international affair. Somewhere in the software supply chain, there are always non-European companies, even if, for convenience’s sake, you count open-source solutions as ‘sovereign’.
Linux is everywhere, but which one?
One of the most important components in the software stack is the operating system. A Linux distribution is almost always active for the IT networks behind the scenes. Despite this uniform adoption, the nationality of such a Linux distribution has so far remained off the radar in sovereignty discussions. Unjustly so, in our opinion, because you can only speak of sovereignty or digital autonomy if you can continue all aspects of your software supply chain on your own.
This is where SUSE can play an important role. As Red Hat’s main challenger, it offers support for many Linux distributions as an OS for critical IT systems. And, crucially for sovereign ambitions, it is entirely European. In an interview with Techzine in the middle of last year, CEO Dirk-Peter van Leeuwen, a Dutchman, stated that SUSE has an advantage as a European player.
At the same time, he stated that open source knows “no boundaries.” Whereas Red Hat has been shielding its own RHEL (Red Hat Enterprise Linux) and restricting open source for several years, SUSE has opted for an approach whereby customers can, in principle, always withdraw from a partnership.
EQT opts for maximum profit
SUSE was a publicly traded company between 2021 and 2023, but that came to an end with the acquisition by EQT. As befits an investment company, EQT is aiming for the highest possible profit on top of the €2.72 billion that SUSE was worth in 2023. It will consider candidates from around the world. Just look at Pioneer, which was acquired by Taiwanese company Innolux last summer.
During the years that EQT ruled the roost at SUSE, the company grew. The Dutch StackState (2024) and Losant (2026) from the US are the most recent acquisitions. Rancher Labs, part of SUSE since 2020, is also American, but it was acquired well before the company left the stock market. This does not undermine the European nature of SUSE, but it does show that the company is more than just a (on paper) Luxembourg-based Linux specialist. EQT can now put an end to this if it receives a bid from outside Europe.
6 billion is a high price
Together with London-based investment bank Arma Partners, EQT is currently looking for potential new owners for SUSE. A price tag of $6 billion (around €5.5 billion) has been set, depending, of course, on the actual bids that may or may not come in.
That is a hefty price, to say the least, especially since European private equity simply does not have the financial resources that are available in America in particular. This makes it more likely that SUSE will not remain European.
The sovereignty of a Linux distribution is a more technical story than previous controversial takeovers, such as Solvinity, bought by Kyndryl and currently the maintainer of Dutch digital identification system DigiD. Many people are unaware of how dependent society is on enterprise Linux, in whatever form.
Few alternatives
Should SUSE end up in non-European hands, it has already prepared its customers for a migration away from it. That is the advantage of an open-source provider where only support is paid for. Anyone who only wants to consider European Linux suppliers can then look elsewhere. But where? The only major European player is located outside the EU. Canonical, creator of Ubuntu, is the most obvious ‘sovereign’ option that, without SUSE, is considered a provider of LTS, IoT, and workstation-compatible Linux distributions.
It is therefore possible that a non-European buyer could encounter a blockade from EU authorities. However, this is by no means certain. We do not know to what extent European regulators are aware of the critical role that SUSE plays as the only large-scale enterprise Linux vendor within the EU. For the time being, discussions about sovereignty seem to lack the nuance that there is always a non-European component in an IT stack. After all, SUSE may remain European, but every data center in Europe still runs on non-European chips, servers, and network equipment. The extent to which this is a problem is the key question for the issue of IT sovereignty.
Read also: SUSE may be sold again