Acquisition of Red Hat by IBM

[Audio] Good morning/afternoon everyone. Today I'd like to talk about the acquisition of Red Hat by IBM, and the strategies and tactics both organizations employed to make it happen. By the end of this presentation, we will have a better understanding of this successful merger and its implications. Let's get started..

[Audio] M&A can be defining as the combination of two or more companies by the purchase, sale, or consolidation of operations, equity, or assets. There are several types of M&A, including horizontal, vertical and conglomerate mergers. The process of M&A typically consists of multiple stages, ranging from strategic planning, target identification, valuation and negotiation to integration. This slide discusses the introduction of Mergers and Acquisitions..

[Audio] IBM's acquisition of Red Hat in 2019 marked a significant milestone in the information technology industry. Combining their broad portfolios, Red Hat provided their cloud, mobile, middleware and storage solutions to the IBM portfolio while IBM expanded its presence in more than 170 countries. This strategic move saw the two companies better positioned to make innovations in various areas, such as cloud computing, cognitive computing, and the Internet of Things..

[Audio] Acquisition of Red Hat by IBM represented a major milestone in the evolution of digital technology and cloud services. Combining IBM's 20-year history of dominating the web area and supplying complementary services, with Red Hat's industry-leading open source solutions and deep commitment to open source innovation, was a strategic move taken after careful consideration of all the factors involved - strategic planning, target identification, valuation, negotiation and integration. This groundbreaking move paves the way for a new era of digital technology and cloud services, to the benefit of IBM's and Red Hat's customers..

[Audio] Acquisition of Red Hat by IBM saw the deployment of a 'white knight' by Red Hat, allowing them to benefit from IBM's resources and customer base whilst preserving their autonomy. IBM employed a 'friendly takeover', paying a large premium to the pre-takeover share price and retaining the current management team, creating a feeling of continuity and reassuring customers..

[Audio] Acquisition of Red Hat by IBM was strategic, mutually beneficial, allowing IBM to grow its product and service lines and incorporate open-source software solutions while allowing Red Hat to preserve its autonomy, obtain access to IBM's resources and expand its reach. Both companies relied on a variety of defensive tactics and acquisition strategies to make the transaction work, illustrating the key role M&A plays in the corporate world. It is clear that the collaboration between IBM and Red Hat, made possible through this deal, has resulted in a bright future for both companies. Thank you all for listening..