Oct. 28 (UPI) -- American tech company IBM will acquire open source cloud software provider Red Hat for $34 billion, the companies said in a joint statement Sunday.
IBM will pay cash to acquire all of Red Hat's stocks for $190.00 per share and Red Hat will join IBM's Hybrid Cloud team as a distinct unit.
"The acquisition of Red Hat is a game-changer. It changes everything about the cloud market," IBM CEO Ginni Rometty said. "IBM will become the world's #1 hybrid cloud provider, offering companies the only open cloud solution that will unlock the full value of the cloud for their businesses."
Red Hat CEO Jim Whitehurst will also join IBM's senior management team and will continue to lead the unit along with Red Hat's current management team.
"Joining forces with IBM will provide us with a greater level of scale, resources and capabilities to accelerate the impact of open source as the basis for digital transformation and bring Red Hat to an even wider audience -- all while preserving our unique culture and unwavering commitment to open source innovation," Whitehurst said.
As part of the acquisition, IBM and Red Hat will also continue to enhance partnerships with major cloud providers, such as Amazon Web Services, Microsoft Azure, Google Cloud, Alibaba and others.
"IBM is committed to being an authentic multi-cloud provider, and we will prioritize the use of Red Hat technology across multiple clouds," said Arvind Krishna, senior vice president of IBM Hybrid Cloud. In doing so, IBM will support open source technology wherever it runs, allowing it to scale significantly within commercial settings around the world."
Prior to the acquisition the two companies had worked together for 20 years developing software and bringing hybrid cloud solutions to customers.