October 24, 2020

EU has decided to unconditionally approve the acquisition of Red Hat’s entire business by IBM

2 min read

Previously, IBM decided to acquire Red Hat, a well-known open source software manufacturer. Red Hat mainly provides operating systems and related services for enterprises. Upon completion of the acquisition, Red Hat will become part of IBM’s Hybrid Cloud division, providing the company with exceptional growth drivers in the cloud computing arena. However, both IBM and Red Hat are leaders in the technology field, so the acquisition also needs to be approved by many national regulatory authorities around the world.

IBM acquires Red Hat

In recent years, the European Union has often offered anti-monopoly flags to US technology companies. Google was fined $5 billion, EU officially launched an investigation into Broadcom. Therefore, the outside world is very worried about IBM’s wholly-owned acquisition of Red Hat. After all, if the EU does not agree, the deal may eventually be completely ruined.

However, it is surprising that the European Union has decided to unconditionally approve IBM’s acquisition of Red Hat. The EU believes that this transaction will not cause a market monopoly. Therefore, according to the EU merger regulations and other relevant laws and regulations, the EU agreed to the transaction and did not impose any additional conditions on IBM’s acquisition of Red Hat.

Currently, in the global cloud computing market, Amazon and Microsoft are market leaders, and IBM is naturally developing cloud computing, but it is still not comparable to Amazon. After IBM acquired Red Hat, IBM is also intended to expand cloud computing and software subscription services. The enterprise operating system provided by Red Hat is itself charged for the subscription. At the same time, Red Hat also provides additional technical support and solutions for enterprises. For IBM, the acquisition of Red Hat will naturally help cloud computing development.