IBM To Acquire Red Hat, Completely Changing The Cloud Landscape And Becoming World's #1 Hybrid Cloud Provider

- Most significant tech acquisition of 2018 will unlock true value of cloud for business

- IBM and Red Hat to provide open approach to cloud, featuring unprecedented security and portability across multiple clouds

- Deal accelerates IBM's high-value business model, making IBM the #1 hybrid cloud provider in an emerging $1 trillion growth market

- Acquisition will be free cash flow and gross margin accretive within 12 months, accelerate revenue growth and support a solid and growing dividend

- IBM to maintain Red Hat's open source innovation legacy, scaling its vast technology portfolio and empowering its widespread developer community

- Red Hat to operate as a distinct unit within IBM's Hybrid Cloud team

ARMONK, New York and RALEIGH, North Carolina, Oct. 28, 2018 /PRNewswire/ -- IBM (NYSE:IBM) and Red Hat (NYSE:RHT), the world's leading provider of open source cloud software, announced today that the companies have reached a definitive agreement under which IBM will acquire all of the issued and outstanding common shares of Red Hat for $190.00 per share in cash, representing a total enterprise value of approximately $34 billion.

"The acquisition of Red Hat is a game-changer. It changes everything about the cloud market," said Ginni Rometty, IBM Chairman, President and Chief Executive Officer. "IBM will become the world's #1 hybrid cloud provider, offering companies the only open cloud solution that will unlock the full value of the cloud for their businesses.

"Most companies today are only 20 percent along their cloud journey, renting compute power to cut costs," she said. "The next 80 percent is about unlocking real business value and driving growth. This is the next chapter of the cloud. It requires shifting business applications to hybrid cloud, extracting more data and optimizing every part of the business, from supply chains to sales."

"Open source is the default choice for modern IT solutions, and I'm incredibly proud of the role Red Hat has played in making that a reality in the enterprise," said Jim Whitehurst, President and CEO, Red Hat. "Joining forces with IBM will provide us with a greater level of scale, resources and capabilities to accelerate the impact of open source as the basis for digital transformation and bring Red Hat to an even wider audience –  all while preserving our unique culture and unwavering commitment to open source innovation."