EU Approves IBM's Proposed $33 Billion Takeover of Red Hat
June 27 2019 - 9:47AM
Dow Jones News
By Patrick Costello
The European Commission on Thursday unconditionally approved
International Business Machine Corp.'s (IBM) proposed acquisition
of the U.S.-software company Red Hat Inc. (RHT), saying it
concluded the deal wouldn't raise any competition concerns.
The EU said it found that the merged company would continue to
face "significant competition" in all potential markets where IBM's
and Red Hat's activities overlap, including markets for middleware
and system-infrastructure software.
The combined company would also likely not have sufficient
market power to shut out or marginalize competitors by bundling Red
Hat's flagship Enterprise Linux product or degrading their
interoperability with it, the EU said.
The EU said the deal also had a pro-competitive rationale, as
the merger would increase choice for enterprise customers in terms
of shifting workloads between on-premise servers, and multiple
public and private clouds.
IBM agreed to purchase Red Hat in October 2018 for roughly $33
billion in what the U.S.-based IT company said was its biggest
acquisition ever. The EU said it reached its conclusions following
a routine review of the merger.
Write to Patrick Costello at patrick.costello@dowjones.com
(END) Dow Jones Newswires
June 27, 2019 09:32 ET (13:32 GMT)
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