TLDR
- IBM is in advanced talks to acquire Confluent for approximately $11 billion, with a deal potentially announced as soon as Monday
- Confluent’s market cap was around $8 billion on Friday, meaning IBM is offering a premium valuation for the data infrastructure company
- The acquisition would be IBM’s largest recent deal, surpassing its $6.4 billion HashiCorp purchase from last year
- Confluent’s real-time data streaming platform has become valuable as companies build AI capabilities across retail, tech, and financial services
- IBM reported slower cloud software growth in October, making the Confluent deal critical for its AI and cloud strategy
Confluent is close to sealing an $11 billion sale to IBM. The deal could be finalized and announced as soon as Monday.
IBM is offering a premium for the data infrastructure company. Confluent’s market capitalization stood at approximately $8 billion when markets closed Friday.
Sources close to the negotiations caution the deal could still fall through. Neither IBM nor Confluent has commented on the talks.
Confluent specializes in processing real-time data streams at scale. The platform handles bank transactions, website clicks, and other high-volume data feeds.
The Mountain View company has become a hot commodity as AI development accelerates. Its technology manages the massive data streams required for training and running AI models.
Companies across retail, technology, and financial services rely on Confluent’s platform. Real-time data processing has become essential for modern business operations.
Sale Process Attracted Multiple Suitors
Confluent began exploring a sale in October after receiving buyer interest. The company hired an investment bank to manage the process.
The deal reflects strong demand for data infrastructure providers. Companies are racing to build generative AI capabilities and need robust data platforms.
Other major tech deals this year include Salesforce’s $8 billion Informatica acquisition. Alphabet paid $32 billion for cybersecurity startup Wiz.
Palo Alto Networks shelled out $25 billion for CyberArk. The technology sector has seen record dealmaking activity as companies position themselves for the AI era.
Data infrastructure companies have commanded premium valuations. Buyers recognize these platforms as critical for AI development and deployment.
IBM Doubles Down on Software Growth
The Confluent purchase would mark IBM’s biggest acquisition in recent years. Last year’s HashiCorp deal for $6.4 billion was the previous high-water mark.
CEO Arvind Krishna has refocused IBM on software and cloud services. The strategy targets growing demand for AI and cloud computing capabilities.
IBM’s third-quarter results showed mixed performance. Consulting revenue beat expectations, but core cloud software growth slowed.
The slower cloud growth concerned investors and analysts. Many questioned whether IBM could maintain its growth trajectory without stronger software performance.
Acquiring Confluent could address these concerns. The deal would strengthen IBM’s data infrastructure offerings and AI capabilities.
IBM announced layoffs of thousands of employees before year-end. The company is restructuring to prioritize AI-related roles.
Krishna recently disclosed IBM replaced hundreds of HR workers with AI agents. The move freed up resources to hire programmers and salespeople.
Confluent shares ended Friday’s session at $23.14. The stock has traded below its initial public offering levels as investors awaited strategic news.
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