IBM will buy data infrastructure company Confluent in a deal valued at US$11 billion ($16.6 billion), ramping up its cloud-computing offerings to capitalise on an AI-driven demand boom.\u00a0<\/p>\n
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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.\u00a0<\/p>\n
Confluent provides technology needed to manage massive, real-time data streams for artificial intelligence models.\u00a0<\/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
The companies began initial talks about the possibility of a deal over the US summer, building on their existing relationship through IBM\u2019s 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.<\/p>\n
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\u2019s legal counsel, and Paul Weiss advised IBM.<\/p>\n
The offer price of US$31 per share represents a premium of around 34 percent to Confluent’s last close.<\/p>\n
Confluent’s shares surged nearly 30 percent, while IBM was up marginally in early trading.\u00a0<\/p>\n
The Confluent stock is up nearly 44 percent since October 7, the last trading session before Reuters reported that the company was exploring a sale after attracting acquisition interest.\u00a0\u00a0\u00a0\u00a0<\/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.\u00a0<\/p>\n
“With this purchase, IBM improves … recurring revenue, tightening its grip on large enterprises.”<\/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 US$6.4 billion.<\/p>\n
Its US$34 billion deal for Red Hat in 2019 is credited by analysts as the central catalyst that boosted its cloud business.\u00a0<\/p>\n
IBM will fund the Confluent deal with cash on hand and the transaction is expected to close by the middle of 2026.\u00a0<\/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.\u00a0\u00a0\u00a0\u00a0\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"IBM will buy data infrastructure company Confluent in a deal valued at US$11 billion ($16.6 billion), ramping up…\n","protected":false},"author":2,"featured_media":336532,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[256,254,255,64,63,105],"class_list":{"0":"post-336531","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-ai","9":"tag-artificial-intelligence","10":"tag-artificialintelligence","11":"tag-au","12":"tag-australia","13":"tag-technology"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/336531","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=336531"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/336531\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/336532"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=336531"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=336531"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=336531"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}