RHT Red Hat

By Patrick Costello

The European Commission on Thursday unconditionally approved International Business Machine Corp.'s (IBM) proposed acquisition of the U.S.-software company Red Hat Inc. (RHT), saying it concluded the deal wouldn't raise any competition concerns.

The EU said it found that the merged company would continue to face "significant competition" in all potential markets where IBM's and Red Hat's activities overlap, including markets for middleware and system-infrastructure software.

The combined company would also likely not have sufficient market power to shut out or marginalize competitors by bundling Red Hat's flagship Enterprise Linux product or degrading their interoperability with it, the EU said.

The EU said the deal also had a pro-competitive rationale, as the merger would increase choice for enterprise customers in terms of shifting workloads between on-premise servers, and multiple public and private clouds.

IBM agreed to purchase Red Hat in October 2018 for roughly $33 billion in what the U.S.-based IT company said was its biggest acquisition ever. The EU said it reached its conclusions following a routine review of the merger.

Write to Patrick Costello at patrick.costello@dowjones.com

(END) Dow Jones Newswires

June 27, 2019 09:32 ET (13:32 GMT)

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