New York — IBM said on Sunday it had agreed to acquire US software company Red Hat for $34bn, including debt, as it seeks to diversify its technology hardware and consulting business into higher-margin products and services. The transaction is by far IBM's biggest acquisition. It underscores IBM CEO Ginni Rometty's efforts to expand the company's subscription-based software offerings, as it faces slowing software sales and waning demand for mainframe servers. IBM, which has a market capitalisation of $114bn, will pay $190 per share in cash for Red Hat, a 63% premium to Friday's closing share price. Founded in 1993, Red Hat specialises in Linux operating systems, the most popular type of open-source software, which was developed as an alternative to proprietary software made by Microsoft. Red Hat charges fees to its corporate customers for custom features, maintenance and technical support, offering IBM a lucrative source of subscription revenue. Red Hat is one of the very few compan...

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