IBM. Photo: Laborant/Shutterstock.comEU Gives Unconditional Green Light to IBM's $34B Purchase of Red Hat
The European Commission said the acquisition would not create any competition problems in relevant markets.
June 27, 2019 at 05:44 PM
2 minute read
The European Commission on Thursday approved International Business Machines Corp.'s $34 billion acquisition of the Raleigh, North Carolina-based software company Red Hat Inc., setting no conditions.
The Commission said the acquisition would not create any competition problems in relevant markets.
In its investigation, the Commission looked at the impact the transaction would have on the markets for middleware and system infrastructure software. Middleware is software used for making and operating enterprise application software, such as online payment processing. System infrastructure software allows companies to control hardware resources, such as servers, across enterprise application software.
The Commission found that the merged company would continue to face significant competition from other players in all potential markets.
It also looked at whether competition could be harmed if the merged company leveraged its market strength into related markets. Would it, for example, reduce the competitiveness of rivals if it decreased their interoperability with Red Hat's enterprise services?
The Commission concluded that the companies were not powerful enough in their market segments to affect the competitiveness of rivals' offerings in related markets.
The U.S. Department of Justice cleared IBM's plan to acquire Red Hat in May. The merger is expected to be finalised in the second half of 2019.
Hogan Lovells, led by partners Logan Breed and Jan McDavid, advised IBM on antitrust matters tied to its acquisition of Red Hat.
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