UK Edition
Brussels approves 'game-changing' $34bn IBM and Red Hat cloud computing deal
The European Commission has given the green light to IBM's $34bn (£26.8bn) takeover of open-source software pioneer Red Hat in what will be one of the biggest tech mergers in history.
The commission approved the merger unconditionally on Thursday and said that it does not raise any competition concerns, clearing the way for the companies to become the world's largest hybrid cloud provider.
The development means that the deal, which was set to close in the second half of 2019, is still on track ahead of approval from other regulators.
The acquisition is by far IBM's largest commercial deal ever and was labelled a "game changer" by chief executive Ginni Rometty when it was first announced last year.
The US giant will hand Red Hat shareholders $190 per share, a 62pc premium in a bid to accelerate its growth in cloud computing.
Red Hat major institutional investor Vanguard Group is set to take $3.47bn for its 18 million shares, while BlackRock would take $2.3bn and T Rowe Price $2bn, according to shares estimations from Bloomberg on Thursday.
The EU's anti-trust teams have taken close looks at tech mergers, including Facebook's buyout of WhatsApp, in which the social network was fined in 2017 for failing to provide correct information.
Brussels' bans on mergers are extremely rare: since the arrival of European Competition Commissioner Margrethe Vestager at the end of 2014, there have only been six.
Once known primarily for its computer hardware, IBM has made cloud computing a priority in its growth strategy, like Amazon and Microsoft.
Red Hat will continue to operate as a separate unit led by its current management team.