As far as tech industry royalty is concerned, then IBM is right up there with the biggest names in the industry and its move to acquire Red Hat, an open source software firm for a mammoth $34 billion is an indication of its ambitions. As everyone knows, cloud computing is now the emerging industry in which all the biggest tech giants like Microsoft are involved in an arms race to topple or even get close to Amazon Web Services, the industry leader. In such a situation, it is inconceivable for a computing behemoth like IBM to lag too far behind in a space that has been growing at a breakneck pace over the past half a decade or so. Hence, it is not a surprise that IBM has gone for this mega acquisition of Red Hat in an attempt to strengthen its cloud offerings.
However, when it comes to such gigantic mergers, the anti-trust regulators are going to be interested, and in that regard, IBM got a major boost yesterday. It is going to be the third biggest merger in the history of tech mergers and new development, the anti-trust authorities in the European Union gave the merger an unconditional approval. Although the company would need approval from the anti-trust authorities in other countries, it is important to note that the anti-trust authorities in the European Union are quite stringent in their rulings and hence, it should not be a problem for IBM to get the green light in other geographies.
The European Union anti-trust authority released a statement in which it broke the news. It said,
The European Commission has approved unconditionally … the proposed acquisition of Red Hat by IBM, both information technology companies based in the US. The Commission concluded that the transaction would raise no competition concerns.
It is a hugely significant development for IBM, which has been trying to complete the deal for some time and this approval from the EU authorities will go a long way in hastening the completion of the deal.