Red Hat Shareholders Greenlight $34B IBM Acquisition

Mitch Wagner
News Analysis
Mitch Wagner, Executive Editor, Light Reading
1/16/2019



IBM's $34 billion deal to acquire Red Hat took a big step closer to completion, as Red Hat shareholders nearly unanimously approved the deal on Wednesday.

Some 99.5% of shareholders voted to approve the deal, with about 80% of shares casting votes, according to an SEC filing. That puts the deal on track to close in the second half of 2019, according to IBM Corp. (NYSE: IBM).

Specifically, the plan calls for Red Hat Inc. (NYSE: RHT) to become a wholly owned subsidiary of IBM -- consistent with IBM's stated plan, when the deal was announced in October, for Red Hat to operate as a "distinct unit" within IBM's Hybrid Cloud Business Unit. That's important, because often in the case of acquisitions, the acquired company disappears into the parent. (See IBM Buying Red Hat for $34B, Turning Cloud Upside Down.)


You're invited to attend Light Reading’s Big 5G Event!  Formerly the Big Communications Event and 5G North America, Big 5G is where telecom's brightest minds deliver the critical insight needed to piece together the 5G puzzle. We'll see you May 6-8 in Denver -- communications service providers get in free!


Additionally, shareholders approved a compensation plan for Red Hat executive officers in connection with the merger.

The Red Hat acquisition is potentially a big help to IBM's transition to the cloud era, which it has been struggling to do. In IBM's most recent earnings report, filed in October, cloud revenue was up 20%, to $19 billion, less than half the growth of the overall cloud market. Overall revenue was $18.8 billion, down 2%. (See IBM Is Losing the Cloud Race.)

With Red Hat, IBM is betting it can lead customers into the multi-cloud world, as enterprises use more than one cloud platform, as well as on-premises data centers, to run their business. IBM is also looking to Red Hat to infuse its open source culture throughout the company.

Related posts:

— Mitch Wagner Visit my LinkedIn profileFollow me on TwitterJoin my Facebook GroupRead my blog: Things Mitch Wagner Saw Executive Editor, Light Reading

(0)  | 
Comment  | 
Print  | 
Copyright © 2019 Light Reading, part of Informa Tech,
a division of Informa PLC. All rights reserved.
Privacy Policy | Cookie Policy | Terms of Use