IBM is acquiring Red Hat, a major distributor of open-source software and technology, in a deal valued around $34 billion, the companies announced on Sunday. According to a joint statement, IBM will pay cash to buy all shares in Red Hat at $190 each. The open source, enterprise software maker will become a unit of IBM’s Hybrid Cloud division, with Red Hat CEO Jim Whitehurst joining IBM’s senior management team and reporting to CEO Ginni Rometty.
The acquisition is by far IBM’s largest deal ever, and the third-biggest in the history of U.S. tech. Red Hat started 25 years ago as a distributor of a particular flavour of Linux, an open-source operating system that is commonly used in server computers that power company data centres. Today, Red Hat is known for distributing and supporting Red Hat Enterprise Linux, as well as other technologies commonly used in data centres.