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IBM will acquire data streaming platform Confluent in an $11bn deal that extends its push to reposition itself around artificial intelligence technology.
The deal, announced on Monday, valued Confluent at $31 a share — a roughly 34 per cent premium on Friday’s $23.14 closing price in New York. The stock jumped to just less than $30 in early trading, while IBM added 2 per cent to about $314 and extended gains this year to 42 per cent.
The deal marks a significant moment for IBM, which said Confluent was a “natural fit” that would aid its expansion into cloud and wider AI solutions.
Arvind Krishna, IBM’s chief executive, said the deal would allow his company to “deploy generative and agentic AI better and faster”.
In speaking to the Financial Times, Rob Thomas, IBM chief commercial officer, compared Confluent’s technology to industrial revolution-era railroads that “created all of the growth because railroads connected factories to cities, to ports, to people . . . Confluent is really the rails on which all these agents and applications will run.”
The agreement will also allow IBM to streamline its product offering because of overlapping technologies, while expanding Confluent’s services to a wider range of customers. It follows IBM’s takeover of cloud software provider HashiCorp for $6.4bn earlier this year.
California-based Confluent has more than 6,500 customers and operates an open-source data streaming platform that “connects, processes and governs” data and events in real time, the companies said in a joint statement.
It was founded in 2014 and went public at $36 a share in 2021. Confluent’s stock hit a record $93-plus the following year but has subsequently struggled amid competitive pressures and a slowdown in cloud growth.
After the company in July said it had lowered its outlook, shares fell about 30 per cent despite a broader rally of AI stocks.
David O’Hara, managing director at MKI Global Partners, said: “Confluent sits naturally inside IBM’s software segment alongside Red Hat and HashiCorp, and fills a clear gap.”
Given the competition from rivals including Azure, Google and AWS, he expected regulators to see the deal as IBM bulking up rather than as a “move to monopolise data streaming”.
IBM said it expected the deal to boost profits within 12 months of closing in mid-2026 and to improve its free cash flow after two years.
IBM was advised on the financial terms by Centerview Partners, Barclays and JPMorgan, while Paul Weiss acted as its legal adviser. Morgan Stanley was the financial adviser to Confluent and Cooley its legal counsel.