The European Commission announced that it has “approved unconditionally, under the EU Merger Regulation, the proposed acquisition of Red Hat by IBM, both information technology companies based in the U.S. The Commission concluded that the transaction would raise no competition concerns.”
The European Commission announcement follows the approval by the U.S. Department of Justice for the $34 billion acquisition, according to a regulatory filing.
The proposed acquisition was announced in Q4 2018, and approved by Red Hat shareholders in early 2019. The acquisition will allow IBM to take a greater role in the fast-growing hybrid cloud market.
In a final comment on its assessment of the merger, the European Commission said, "In addition, the Commission took note of the potential pro-competitive rationale of this acquisition. This reflects, in particular, IBM's intention to use the complementary capabilities of Red Hat to further develop and offer open hybrid cloud solutions. This would increase choice for enterprise customers who could more easily shift workloads between on premise servers and multiple public and private clouds. Therefore, the Commission concluded that the transaction would raise no competition concerns in any of the affected markets and cleared the case unconditionally."
According to ResearchAndMarkets.com, the global hybrid cloud market was valued at $40.62 billion in 2017, and is expected to reach a value of $138.63 billion by 2023, at a CAGR of 22.7%, during the forecast period (2018-2023).