IBM To Buy Confluent For $9.3B To Expand AI Services

Watch IBM To Buy Confluent For $9.3B To Expand AI Services - Bloomberg on Dailymotion

Transcript

00:00So it's unusual, I suppose, that the acquirer's shares are up in this deal.

00:04So investors seem to like it.

00:06Why is IBM making this move now to acquire Confluent?

00:09It's a great sign that shares are up.

00:11That means that investors are confident in M&A and consolidation.

00:16And dealmakers love to see that because when one big company's acquirer stock goes up,

00:21others take note and other boardrooms then get the confidence to make a move.

00:25But in terms of why IBM is doing this now, for years, Arvind Krishna, the CEO,

00:30has been looking to do more tuck-in acquisitions after the big HashiCorp deal of a few years ago.

00:36But this is sort of his first big foray back into big M&A.

00:40And if investors like it, we could be seeing more.

00:42Right. Including debt, this deal is worth $11 billion.

00:45Nora mentioned that Confluent's a data streaming company.

00:48But what exactly does it do and why was it exploring a sale?

00:51So over the summer, reports first came out that it was exploring a sale.

00:55The stock had been down sort of since the IPO.

00:58But it was doing okay and hanging in there.

01:01Then it brought on an investment bank as it started to get takeover interest from IBM,

01:06perhaps other companies, and private equity.

01:08It was reported.

01:10But I think this idea that companies like Confluent are sort of in the guts of AI,

01:16this is a trend that big infrastructure players are saying,

01:20okay, we need to buy companies that kind of fit in this theme of AI,

01:23but in a way that kind of provides more services to their customers.

01:28So maybe it's not necessarily an AI bet for IBM, even if they're saying it is.

01:32It's something else that they could provide to their enterprise customers.

01:36Right. It's an AI deal that doesn't involve data centers for once.

01:40Talk a little bit about or put this deal into the context of tech M&A so far.

01:45It's just been so busy.

01:46We just had a story in our deals newsletter today about, you know, headed for a trillion.

01:52A lot of the deals are not necessarily straight M&A happening in tech.

01:56You might have seen a lot of the open AI, big fundraising rounds,

02:00some of these circular data center deals.

02:02But if you just look at the Netflix Warner Brothers deal that we keep talking about,

02:07that has also a tech theme.

02:09So a lot of these, you know, big tech companies are starting to look at M&A.

02:13We saw Google and Whiz earlier this year.

02:16You know, IBM also, you know, has closed some larger deals.

02:20So it's exciting to see.