EU gives IBM unconditional approval for acquisition of Red Hat

EU gives IBM unconditional approval for acquisition of Red Hat

The American tech giant IBM would receive unconditional permission from the European Union (EU) to acquire Red Hat. That’s what the insiders say about Reuters. Big Blue announced last October its intention to buy Red Hat for 34 billion dollars.

The European Commission is due to announce a decision on the acquisition on 27 June. Both the Commission and IBM refused to respond to Reuters’ message. The United States gave the go-ahead for the takeover last month, without imposing any further requirements. In January, the shareholders already agreed.

IBM has invested heavily in its cloud department in recent years, hoping to compensate for the stagnant demand for its legacy products. Until now, however, this has not led to real growth. With the acquisition of Red Hat, IBM hopes to have found a solution. The purchase will provide the company with Red Hat’s Linux distribution, which is widely used by enterprises.

In addition, Red Hat has products with capabilities for hybrid and multi-cloud environments. These include developer tools designed to help enterprises create cloud services. The popular Ansible platform for the automation of application management will also be acquired by Big Blue. All these products are available under an open source license, although there are also commercial versions. With those commercial versions, Red Hat earns his money.

Best choice for growth

CEO Jim Whitehurst said at the Red Hat Summit 2019 in May that IBM’s acquisition was the best choice for the company to continue to grow and bring open source even more to business. The acquisition will give the company access to much more scale, money and other resources to expand and accelerate its activities in the business market. According to Whitehurst, this would not have been possible without an acquisition or investment by a venture capitalist.

This news article was automatically translated from Dutch to give a head start. All news articles after September 1, 2019 are written in native English and NOT translated. All our background stories are written in native English as well. For more information read our launch article.