IBM buys Red Hat for £26.52bn in its biggest purchase todate

America’s IBM acquired software company Red Hat in a  £26.52 ($34bn) cash and debt deal, making its biggest ever acquisition.

Red Hat founded 25 years ago, was valued at  £16bn ($20.5bn) at the end of trading on Friday.

Red hat will be a star unit within IBM’s Hybrid Cloud team.

Red Hat is an open source software company that gives way the source code for its core products and known for Red Hat Enterprise Linux Operating system. Which means anyone can download them free, and even Oracle uses Red Hat’s source code for its own Oracle Linux product. Companies pay Red Hat to support those products, to the tune of around $3bn in revenue each year.

Open source was once a fringe, idealistic movement in software, but it’s now a core part of how big companies operate, from internet giants like Google and Facebook to Walmart and ExxonMobil.