IBM’s 2018 acquisition of Red Hat was the largest software acquisition at the time, valued at approximately $34 billion.
Red Hat was a major provider of enterprise open-source software, best known for Red Hat Enterprise Linux. IBM said the purchase would strengthen its hybrid-cloud strategy by combining Red Hat’s platform and developer ecosystem with IBM’s consulting, infrastructure, and enterprise technology businesses.
The transaction closed in July 2019, and Red Hat continued to operate as a distinct unit within IBM’s Cloud and Cognitive Software segment. The deal illustrated how established technology companies use acquisitions to reposition themselves in markets that influence long-term valuation.
IBM is not usually grouped with the fastest-growing consumer technology companies, but it remains a major publicly traded enterprise-software and services business. Market capitalization reflects investors’ expectations about future earnings, so strategic acquisitions can affect valuation even before their financial benefits fully appear.