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RALEIGH – The federal government has approved IBM's $ 1.4 billion acquisition of Red Hat based in Raleigh, according to a regulatory filing.
IBM revealed Monday morning that the Justice Department had informed Big Blue of approval on Friday.
"On May 3, 2019, IBM was informed that the US Department of Justice had completed the review of its proposed acquisition of Red Hat by IBM without recourse or conditions and that it was had received a notice of early termination of the waiting period under the antitrust law Hart-Scott-Rodino. Improvements Act of 1976, "said IBM in the file filed with the SEC.
"IBM and Red Hat continue to work with competition authorities in other jurisdictions, and IBM is still waiting for the transaction to close in the second half of 2019."
The agreement was announced last October.
Color change: Red Hat tower is white fedora but keeps bright red stripe
IBM shares fell slightly on the news as Red Hat shares rose on pre-market transactions.
Interestingly, IBM President and CEO Ginni Rometty is due to deliver the launch speech Saturday at the NC State.
During its conference call on the April results, IBM highlighted the impact of the agreement on Big Blue, especially in cloud computing.
Jim Kavanaugh, IBM Senior Vice President and Chief Financial Officer, said:
"First of all, we are very excited about the potential combination of IBM and Red Hat. In a handful of areas, we've talked about accelerating leadership in a $ 1 trillion hybrid cloud market. We believe that this differentiates us as we progress and that we can not be more enthusiastic when you examine the performance of Red Hat at the end of Exercise 19, and what they have reported and reported. shared publicly, thereby accelerating revenue growth in the coming years. % if I remember correctly, strong contribution from the margin and they generate very important cash flow. "
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Reporters said in March that the agreement was facing obstacles to get the federal government's approval. This is reflected in various media reports in recent days, including comments from a senior IBM official at a meeting in Europe where he said IBM "may" have potentially acquired the giant software and open source services based in Raleigh.
However, an IBM spokesman said the agreement was still progressing,
"Your story is wrong," Douglas Shelton said. "As IBM has previously announced, the deal is expected to close in the second half of 2019."
Last week, Red Hat unveiled a new logo, a white fedora and white letters on a red stripe at the top of Red Hat's office tower in downtown Raleigh.
The two companies announced that Red Hat would operate as a separate company owned by IBM, with Red Hat chief executive Jim Whitehurst remaining in command.
Note: This story has been corrected to reflect the value of the transaction at $ 34 billion.
Here is the new Red Hat logo: why change? 'A very different company' today
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