Categories Earnings, Technology, U.S. Markets News
Red Hat shareholders give green signal for acquisition by IBM
The closely-followed acquisition of software company Red Hat (RHT) by tech giant IBM (IBM) moved closer to completion after the former’s shareholders overwhelmingly approved the deal Wednesday. More than 80% of the 176-million shareholders voted in favor of the transaction, which has already been ratified by Red Hat’s board of directors.
In October last year, the Raleigh-based company signed a definitive agreement to be acquired by IBM for $34 billion – one of the biggest deals in the tech sector in recent times. The companies expect the transaction to complete in the second half of 2019.
As per the terms of the transaction, Jim Whitehurst, Red Hat’s chief executive officer, will join IBM’s leadership team. By acquiring Red Hat, IBM intends to strengthen its foothold in the cloud computing market and return to the growth path. Of late, profitability has been affected by the ongoing slump in the PC market and IBM’s overdependence on its low-margin core business.
As per the terms of the transaction, Jim Whitehurst, Red Hat’s chief executive officer, will join IBM’s leadership team
On completion of the transaction, Red Hat will become a part of the Big Blue’s Hybrid Cloud division and will start contributing to cash flow and gross margin within twelve months. Red Hat’s software development prowess will give IBM the strength to compete effectively with Amazon (AMZN) and Microsoft (MSFT) in the areas of cybersecurity and cloud computing.
In the third quarter, Red Hat’s earnings and revenues rose sharply aided by a further strong subscription growth and stable demand for its hybrid cloud technology solutions.
Continuing the turnaround that started a few months ago, Red Hat shares maintained the uptrend this week and traded slightly higher Wednesday. IBM’s stock, which has been struggling to recover from the recent multi-year lows, traded broadly flat throughout the session.
Listen to publicly listed companies’ earnings conference calls along with the edited closed caption text
Most Popular
MKC Earnings: Key quarterly highlights from McCormick & Company’s Q1 2023 financial results
McCormick & Company, Incorporated (NYSE: MKC) reported first quarter 2023 earnings results today. Sales increased 3% year-over-year to $1.56 billion. Sales growth was 5% in constant currency. Net income was $139.1
Earnings: Trxade Health (MEDS) reports 16% rise in FY22 revenue; loss narrows
Trxade Health, Inc. (NASDAQ: MEDS), a leading health service IT company, reported a double-digit increase in revenues for fiscal 2022. The company's full-year net loss narrowed from the prior year.
Can KB Home (KBH) beat market headwinds in 2023?
KB Home (NYSE: KBH) has been expanding its presence beyond the key markets lately, while also diversifying homebuilding operations by offering highly customized options to customers. The downturn in the
