IBM to Buy Netezza for $1.7 bn

Added by Gary Dunn on September 22, 2010

International Business Machines Corp (IMB) has made an offer amounting $1.7 billion to purchase Netezza Corporation, a data analytics company. IMB’s intention is to enlarge its technology services business and also to enable its clients to get improved analyze market information.

The announcement made on Monday indicates that IBM is changing its center of attention from commoditized hardware towards higher-margin software and services, mostly analytics, which will enable its clients to prevent fraud and evaluate market data plot trends.

This deal has estimated Netezza shares at $27 per share, whereas last week closed with $24.60. Early Monday evening, Netezza stocks increased from 15.2 per cent to $28.50. This deal has also resulted in the lifting rumor that Teradata Corporation could be the next objective of IBM and is a recent add-on to the rash of achievements in the technology sector. For example, the Intel Corporation agreed paying $7.7 billion to purchase McAfee Inc last month.

Later this September, Hewlett-Packard Company has planned to but Arcsight worth $1.5 billion. Analysts anticipate that these takeovers along with many others in technology sector may lead to low interest rates and decreased stock market value.