IBM said on Monday it will buy data infrastructure company Confluent in a deal valued at $11 billion, ramping up its cloud-computing offerings to capitalize on an AI-driven demand boom. <\/p>\n
Big Blue, under CEO Arvind Krishna, has doubled down on M&A to beef up its cloud and software business – a high-growth, high-margin area – as customers invest to upgrade their digital infrastructure to house complex artificial intelligence applications. <\/p>\n
Mountain View, California-based Confluent provides technology needed to manage massive, real-time data streams for artificial intelligence models. <\/p>\n
“IBM and Confluent together will enable enterprises to deploy generative and agentic AI better and faster,” Krishna said in a statement.<\/p>\n
“With the acquisition of Confluent, IBM will provide the smart data platform for enterprise IT, purpose-built for AI.”<\/p>\n
TALKS BEGAN IN SUMMER<\/p>\n
The companies began initial talks about the possibility of a deal over the summer, building on their existing relationship through IBM’s partner network, according to a source familiar with the discussions. <\/p>\n
After IBM signaled its interest, Confluent hired advisers and launched a formal auction process, but IBM ultimately prevailed, according to a source familiar with the matter. As part of the deal, Confluent CEO and co-founder Jay Kreps is joining IBM Software and will report to Rob Thomas, an IBM spokesperson said. <\/p>\n
Centerview advised IBM, while Morgan Stanley advised Confluent. Cooley served as Confluent’s legal counsel, and Paul Weiss advised IBM.<\/p>\n
The offer price of $31 per share represents a premium of around 34% to Confluent’s last close. Confluent’s shares surged nearly 30%, while IBM was up marginally in early trading. The Confluent stock is up nearly 44% since October 7, the last trading session before Reuters reported that the company was exploring a sale after attracting acquisition interest. <\/p>\n
“IBM is buying the critical data firehose that supports the AI hype,” said Michael Ashley Schulman, chief investment officer at Running Point Capital. <\/p>\n
“With this purchase, IBM improves … recurring revenue, tightening its grip on large enterprises.” <\/p>\n
STRING OF ACQUISITIONS <\/p>\n
IBM has long turned to deal-making to gain scale and fend off competition, especially in cloud computing. <\/p>\n
In April last year, the company bought cloud firm HashiCorp in a deal valued at $6.4 billion. Its $34 billion deal for Red Hat in 2019 is credited by analysts as the central catalyst that boosted its cloud business. <\/p>\n
IBM will fund the Confluent deal with cash on hand and the transaction is expected to close by the middle of 2026. <\/p>\n
The deal is expected to boost IBM’s adjusted core earnings within the first full year of the transaction’s completion and it will add to free cash flow in year two.<\/p>\n","protected":false},"excerpt":{"rendered":"
IBM said on Monday it will buy data infrastructure company Confluent in a deal valued at $11 billion, ramping up its cloud-computing offerings to capitalize on an AI-driven demand boom. Big Blue, under CEO Arvind Krishna, has doubled down on M&A to beef up its cloud and software business – a high-growth, high-margin area – as customers invest to upgrade their digital infrastructure to house complex artificial intelligence applications. Mountain View, California-based Confluent provides technology needed to manage massive, real-time data streams for artificial intelligence models. “IBM and Confluent together will enable enterprises to deploy generative and agentic AI better […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7],"tags":[],"class_list":["post-979305","post","type-post","status-publish","format-standard","hentry","category-it-2"],"acf":[],"_links":{"self":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/posts\/979305","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/comments?post=979305"}],"version-history":[{"count":0,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/posts\/979305\/revisions"}],"wp:attachment":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/media?parent=979305"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/categories?post=979305"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/tags?post=979305"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}