Under the agreement, 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. Red Hat will continue to operate as a distinct unit within IBM's Hybrid Cloud team, and IBM says it will remain committed to Red Hat's open governance, open source contributions, participation in the open source community, and development model, and fostering its widespread developer ecosystem.
Long a supporter of open source technologies, IBM's latest move is targeted at addressing what the company says is the next stage in the evolution of cloud computing – the "hybrid cloud." Hybrid cloud computing refers to a cloud computing environment that uses a mix of on-premises private-cloud and third-party public-cloud services with orchestration between the two platforms.
"The acquisition of Red Hat is a game-changer," says Ginni Rometty, IBM Chairman, President and Chief Executive Officer. "It changes everything about the cloud market. 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," says Rometty. "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."
Jim Whitehurst, President and CEO, Red Hat adds, "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. 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."