IBM Acquisition of Red Hat Has $975 Million Termination Fee

(Bloomberg) -- If International Business Machines Corp.’s $33 billion takeover of Red Hat Inc. doesn’t get done, the open-source software provider will have to pay the enterprise technology giant a breakup fee of $975 million, according to filings with the U.S. Securities and Exchange Commission.

There are several conditions in the deal agreement that cover the termination fee, including a "no shop" provision that prevents Red Hat, a maker of Linux operating system software, from soliciting other acquisition proposals, according to the filings.

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