IBM CEO talks about acquiring red hat: we will change the industrys rules of the game

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 IBM CEO talks about acquiring red hat: we will change the industrys rules of the game


IBM Chief Executive Ginni Rometty pointed out in an interview that IBMs $34 billion acquisition of Red Hat would make IBM a game changer and would hopefully achieve growth in cash flow and gross margins in the first year.

IBM Chief Executive Officer Rowland and Red Hat Chief Executive Officer Jim Whitehurst were interviewed by CNBC on Monday. Rowland told CNBC Monday that the acquisition was the third largest technology transaction in U.S. history and would create tremendous value for IBM.

Luo Ruilan said the deal does not mean red hat businesss 4% revenue growth.

It will also increase free cash flow and gross profit margins in the first year, she said. Its about the development of IBM as a whole, and thats why were so optimistic that this will definitely accelerate our high-value model.

Mr Rowland also insisted that IBMs dividend was not only very safe but would continue to grow because of the companys prudence and financial flexibility. She pointed out that IBMs cash in the latest quarter was US $15 billion and free cash flow was US $12 billion. She said that this is enough to maintain IBMs dividend and continue to stimulate business growth.

For Red Hat, the acquisition will bring huge size and accelerated growth and career opportunities for every employee,Mr. Whitehurst, Red Hats president and chief executive, said in an interview.

And, as we say, we are passionate about open source. If there is a way to ensure that open source is the leading platform in the future, we will push this forward. White and Hearst plan to remain in office after the merger.

Luo Ruilan said that the deal will also make IBM the first in the field of hybrid cloud. The traditional computer giant has struggled in recent years to launch a strategic transformation into artificial intelligence and cloud computing.

This will be a key part of IBMs future business, she said. For companies that move their business to cloud computing, Red Hats technology is critical for a company that is moving toward a trillion-dollar cloud computing market, adds Rowland. Its going to be a rule-changer for IBM, and we know its right, Rowland said. I think its the most important thing for our customers and our business, otherwise I wouldnt do it. The acquisition of red hat is the biggest deal ever made by IBM. IBM will buy all the red hats stock at the price of $190 per share. The closing price of IBM fell 4.13% on Monday local time, after hitting a 52 week low. Red Hat Inc shares rose 45.38% to $169.63 a share. (Han Bing) source: NetEase science and technology report editor: Wang Fengzhi _NT2541

This will be a key part of IBMs future business, she said. For companies that move their business to cloud computing, Red Hats technology is critical for a company that is moving toward a trillion-dollar cloud computing market, adds Rowland.

Its going to be a rule-changer for IBM, and we know its right, Rowland said. I think its the most important thing for our customers and our business, otherwise I wouldnt do it.

The acquisition of red hat is the biggest deal ever made by IBM. IBM will buy all the red hats stock at the price of $190 per share. The closing price of IBM fell 4.13% on Monday local time, after hitting a 52 week low. Red Hat Inc shares rose 45.38% to $169.63 a share. (Han ice)