IBM closed its $34 billion acquisition of Red Hat, completing one of the largest tech acquisitions of all time. IBM had originally announced its intent to acquire Red Hat, a major distributor of open-source software and technology, in October last year. The US Department of Justice gave its stamp of approval in May 2019, and the last big hurdle was cleared when the EU gave its unconditional approval at the end of June.
Here’s a look at how the IBM’s purchase of Red Hat finds a place among the five largest merger and acquisition (M&A) deals in the tech sector:
1) Dell buys EMC Data Storage for $67 billion
Dell and EMC, an IT company focused on cloud-based storage centres, in 2016 joined forces to create a huge technology powerhouse with a combined revenue of $74 billion. After the deal, Dell also reportedly tried to pull off a reverse-merger with VMware in 2018, but that did not come to fruition. Instead, five years after going private, Dell instead returned to public markets in December on the New York Stock Exchange
2) Avago Technologies merges with Broadcom in $37 billion deal
In 2015, Avago Technologies proposed a $37 billion merger with one of the world’s largest chipmakers, Broadcom. The combined company, based in Singapore and named Broadcom Inc., became the third-largest US semiconductor maker by revenue, behind Intel Corp. and Qualcomm Inc.
3) IBM buys Red Hat for $34 billion
The Red Hat deal forms part of IBM’s ambition to expand its cloud business and follows similar, albeit smaller, recent moves made by other big tech firms such as Microsoft Corp. and Salesforce.com Inc. to bet on open-source companies. The $34 billion price tag makes this IBM’s biggest acquisition to date. The deal is the largest ever in software space, eclipsing Microsoft's $26.2 billion purchase of LinkedIn and Facebook Inc.’s $22 billion acquisition of messaging app WhatsApp.
4) SoftBank takes over Arm for $31.4 billion
SoftBank Group Corp.’s acquired UK chip designer Arm Holdings in 2016. The acquisition happened immediately after the UK voted to leave the EU with big plans to become a leader in the internet of things and connected devices. So far, Arm has struggled to live up to expectations. In fact, in 2018, SoftBank offloaded 51% of the UK chip designer’s Chinese subsidiary to a China-led group of investors. The deal was reportedly worth just $775.2 millon.
5) Microsoft acquires LinkedIn for $26.2 billion
Microsoft’s deal to buy LinkedIn closed in December 2016. The social networking site remained an independent company, and Microsoft began integrating its products with the platform, which now has over 500 million registered users. The move also brought LinkedIn founder Reid Hoffman into the fold as a Microsoft board member, and gave latter a much stronger foothold in Silicon Valley.