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| IBM's tie-up with Red Hat will be one of the biggest tech mergers ever GETTY IMAGES NORTH AMERICA/AFP |
Brussels (AFP) - The EU's powerful anti-trust authority on Thursday cleared the buyout by IBM of open source software company Red Hat, one of the biggest tech mergers in history which the computing giant said would enhance its cloud offerings.
"The
European Commission has approved unconditionally ... the proposed acquisition
of Red Hat by IBM, both information technology companies based in the US,"
a statement from the EU executive said.
"The
Commission concluded that the transaction would raise no competition
concerns," it added.
The
commission, the guardian of competition in the EU, took very little time to
authorise the operation and has not demanded any concessions from the
companies.
If approved
by authorities worldwide, the tie-up will be the third biggest tech merger in
history, according to CNBC. Red Hat said it was the biggest involving a
software company.
Cloud
computing refers to the delivery of computing services over the internet,
including storage and software, and is considered fundamental to a highly connected
world.
The EU's
anti-trust teams have taken close looks at tech mergers, including Facebook's
buyout of WhatsApp, in which the social network was fined in 2017 for failing
to provide correct information.
Brussels'
bans on mergers are extremely rare: since the arrival of European Competition
Commissioner Margrethe Vestager at the end of 2014, there have only been six.
Once known
primarily for its computer hardware, IBM has made cloud computing a priority in
its growth strategy, like Amazon and Microsoft.
Red Hat
will continue to operate as a separate unit led by its current management team.
Founded in
1993, Red Hat launched its famous version of Linux OS a year later, becoming a
pioneering proponent of the open source movement that arose to counter giants
like Microsoft whose models were based on keeping their source code secret.
The
Raleigh, North Carolina based company is today present in 35 countries and
employs some 12,000 people, and is one of the best-known open-source players
whose customers pay for tailor-made solutions.
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