The IBM (NYSE:IBM) acquisition of Red Hat has finally been completed.
Here are eight things that investors should know about the deal:
- IBM is shelling out $34 billion to buy the cloud software services business, which makes it the former’s largest acquisition in its history, which spans more than a century.
- The purchase garnered approval from EU regulators in late June, as well as U.S. regulators in May.
- IBM will be paying about $190 per share of Red Hat, marking a 63% premium.
- The move is designed to help IBM expand on its cloud computing services and products as the company has been moving towards this direction since Ginni Rometty took over as CEO in 2012. The business has been moving away from traditional hardware products.
- Red Hat CEO Jim Whitehurst said that he and his management team will remain with the company, with Whitehurst joining IBM’s senior management team and report to Rometty.
- IBM’ will keep Red Hat’s headquarters in Raleigh, North Carolina, as well as its facilities, brands and practices, which will operate as a distinct unit within IBM.
- IBM and Red Hat will offer “a next-generation hybrid multicloud platform” that will be “based on open source technologies, such as Linux and Kubernetes,” according to the companies.
- IBM added that Red Hat will continue “to build and expand its partnerships, including those with major cloud providers, such as Amazon Web Services, Microsoft Azure, Google Cloud and Alibaba.”
IBM stock is down about 0.9% on Tuesday.