IBM Closes Deal to Purchase Red Hat For $34 Billion

       First off, a massive congratulations are in order for all owners of Red Hat(RHT) shares- Your shares are going to be purchased at a 63% premium, thanks to International Business Machine Corporation, better known as IBM.

       IBM announced on Sunday that they came to an agreement to buy Red Hat, the multinational software company that provides open-source software products to the enterprise community. IBM, one of the largest and most reputable technology services company will purchase all outstanding shares of Red Hat for a premium of $190. That number represents a $73 upgrade on the Friday closing price for a total of $34 billion.

        The acquisition, which is IBM's biggest acquisition ever and the third largest tech acquisition ever is much needed for the company, as they have lost about 17% of their share value in the last year. But could this really be the boost the company needs? IBM chairman seems to think so, stating " The acquisition of Red Hat is a game-changer. It changes everything about the cloud market. Most companies today are only 20% along their cloud journey, renting compute power to cut cost, the next 80% is about unlocking real business value and driving growth. This is the next chapter of cloud."

       IBM has been trying to get into cloud service but have been bumped by Amazon web services, Google cloud, and Microsoft Azure. Who Red Hat already has a partnership with, one that will be continued even after this move.  

       IBS said that it will halt its share buyback program, but the dividend will remain untouched. 

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