In what's been described as the "most significant tech acquisition of 2018," IBM has announced its intention to acquire open-source software company Red Hat for about $33 billion, pending approvals.
Both IBM and Red Hat do significant business with the state of California, among other entities.
"The acquisition of Red Hat is a game-changer," IBM chief Ginni Rometty said in a statement. "It changes everything about the cloud market."
According to a CNN report, "IBM buying Red Hat means that it will start providing technology to its biggest competitors, including Amazon, Microsoft and Google. Red Hat partners with all of them, and IBM said it will continue the partnerships after the acquisition and work to expand on them."
The acquisition would be the largest in IBM's 107-year history, according to the St. Louis Business Journal. "The deal will help both companies accelerate the move to cloud computing among big corporate clients, as well as providing a much-needed boost to IBM’s revenue growth," the Journal said.
IBM, which has been trying to gain ground on Amazon and Microsoft in the cloud infrastructure sector, will pay about $33 billion cash for all Red Hat shares — about $190 per share, CNBC reported. That's a boost of about 63 percent over Red Hat's closing share price Friday, before the deal was announced. The deal is contingent on shareholder and regulatory approval.
IBM's CEO Rometty and Red Hat CEO Jim Whitehurst will be interviewed at 3 p.m. today on CNBC's "Mad Money."
