Antitrust IntelligenceAntitrust IntelligenceAntitrust Intelligence
Sign in
Notification
Font ResizerAa
  • For Lawyers
    For Lawyers
    Here, you’ll find the regulatory trends and hidden market shifts that others miss. You’ll learn where markets (and your clients’ industries) are heading—and how to…
    Show More
    Latest News
    Brussels Pressures Italy to Lift Golden Power Hurdles on UniCredit Deal
    July 11, 2025
    Lloyds, Barclays, Santander’s £6 billion Risk Hinges on July UK Supreme Court Ruling
    July 10, 2025
    Zoetis Faces Higher Risks in UK Study than EU Antitrust Probe
    July 9, 2025
    OECD List with Most and Least Competitive Industries
    July 6, 2025
  • For Investors
    For Investors
    Regulatory events move markets—often faster than earnings reports. A merger approval or a hefty fine can send a stock soaring or sinking in a day.…
    Show More
    Latest News
    Bank Pekao: On Its Way to lead Poland’s financial sector
    July 8, 2025
    Nexi: Solid Numbers With Regulatory Events as Catalysts
    July 2, 2025
    Ercros: A Risky Bet With a Good Margin is Coming to an End
    June 25, 2025
    Zalando: two upcoming regulatory events may have minor upside
    June 23, 2025
  • News
    News
    Stay informed with our global antitrust news compilation—bringing you the latest developments, regulatory updates, and key cases from around the world, all in one place
    Show More
    Latest News
    Italy Launches Investigation into Revolut for Alleged Unfair Commercial Practices
    July 10, 2025
    Türkiye Imposes Daily Fines on Google Over Continued Non-Compliance With Competition Order
    July 10, 2025
    Ferrero Nears $3 Billion Deal to Acquire WK Kellogg, Expanding U.S. Food Empire
    July 10, 2025
    Seven Housebuilders agreed to pay £100 Million to Settle Cartel Probe
    July 9, 2025
  • Why Join?
  • Memberships
Reading: $33 Billion IBM-Red Hat M&A Shouldn’t Spark Antitrust Concerns
Font ResizerAa
Antitrust IntelligenceAntitrust Intelligence
Search
  • For Lawyers
  • For Investors
  • News
  • Why Join?
  • Memberships
Have an existing account? Sign In
Follow US
Lawyers

$33 Billion IBM-Red Hat M&A Shouldn’t Spark Antitrust Concerns

Editorial
Last updated: March 10, 2025 9:46 am
Editorial
Published May 7, 2019
Share

Rationale of the deal.

IBM’s proposed acquisition of Red Hat aims to combine the world’s largest IT service vendor with the biggest open source software company in a deal that isn’t expected to raise significant regulatory concerns. The companies overlap in the provision of infrastructure software and application software, though the merger is mostly vertical with complementary businesses. Regulatory approvals from the U.S. and the EU are needed, but the companies won’t need approval from China to close the transaction.

Contents
Rationale of the deal.80% chances of approvalParties may get unconditional approvalApproval likely in 3QCompanies don’t need approval from China

80% chances of approval

The IBM-Red Hat merger will likely be cleared, given the limited horizontal overlaps between their businesses. EU precedents on Oracle-Sun, Micro Focus-HPE and most recently in Microsoft-Github suggest that middleware and DevOps are very fragmented markets with low barriers to entry. The companies aren’t likely to have a significant combined market share in the relevant markets in which they overlap. This means the deal isn’t likely to raise horizontal concerns, which are ultimately the sort that could complicate approval.

Parties may get unconditional approval

The rationale for the deal and IBM’s internal documents may be enough evidence to fend off possible vertical or conglomerate concerns. EU regulators may want reassurance that IBM won’t damage the open source community and won’t condition access to Red Hat’s products and services on the use of IBM’s products. IBM’s internal documents showing how to capture cross-selling opportunities without compromising Red Hat’s neutral status may help avoid imposition of behavioral remedies, as Microsoft did when it acquired Github.

Approval likely in 3Q

The companies may get a phase one merger approval after long pre-notification talks. Unlike other deals in new technology markets where regulators had to gather a lot of information before proceeding with the analysis, the European Commission has reviewed a number of deals in this sector in the past several years. This could allow regulators to reach a decision during a phase one review, including remedies if needed.

Companies don’t need approval from China

Regulatory approvals from the U.S. and the EU are needed, but the companies won’t need approval from China to close the transaction. The deal may hit unexpected delays, given the uncertainty surrounding Brexit and the EU elections in 2019. The companies may need to file the deal in London and Brussels. If the companies were to file the deal only in Brussels and the EU decision comes after March 29, in the event of a “no-deal” Brexit scenario, the parties may not be able to close the merger until they get a separate U.K. approval. Additionally, if the parties file the deal in Brussels in 2Q, the decision may be slowed by the European elections to be held in May.

You Might Also Like

Brazilian Government Supports Gol-Azul Merger to Strengthen Airline Sector

Telefónica, TIM, and Digi Push for More M&A, But Regulators Hit the Brakes

Monte dei Paschi di Siena Proposes €13.3 Billion Merger with Mediobanca

GVS’s profits are above CMA’s safe heaven, but below threshold to raise concerns

Petz and Cobasi Merger Set to Reshape Brazil’s Pet Retail Market

TAGGED:IBMmergeroverlapRedhattechnology

Weekly Newsletter

Insights you can turn into money or clients
Antitrust Intelligence

About Us

We identify and quantify regulatory risks so you can take better decisions
Menu
  • Lawyers
  • Investors
  • News
  • My Bookmarks
  • About Us
  • Contact
Legals
  • Cookie Policy
  • Terms & Conditions
  • Privacy Policy

Subscribe Us

Subscribe to our newsletter to get weekly ideas to make money and get new clients!

© 2025 Antitrust Intelligence. All Rights Reserved. - Web design Málaga by Seb creativos
Antitrust Intelligence
Manage Consent
To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behavior or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
Functional Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes. The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
Manage options Manage services Manage {vendor_count} vendors Read more about these purposes
View preferences
{title} {title} {title}
Antitrust & Financial Markets? Download Your Free Guide NOW
Five tips to find unique regulatory intelligence
Welcome Back!

Sign in to your account

Username or Email Address
Password

Lost your password?