Kafka in Blue: IBM Buys Confluent

IBM wants to buy Confluent for around eleven billion US dollars. Big Blue is offering shareholders of the Californian data streaming platform provider $31 per share – a premium of well over thirty percent on the price before the announcement of the impending takeover. The largest shareholders and investors of Confluent, who together hold about 62 percent of the voting rights of issued common stock, have already approved the deal. Subject to the usual closing conditions, the management of both companies expects to complete the acquisition by mid-2026.

Confluent expects record revenue

Confluent, founded eleven years ago in Mountain View, California, and listed on Nasdaq since 2021, is expected to break the one billion dollar revenue mark for the first time in fiscal year 2025. The software of the same name is based on the open-source data and event streaming platform Apache Kafka, which is now more or less the standard in this field. Confluent's feature set spans data streaming, connectors, stream governance, stream processing, table flow, Confluent Intelligence, and streaming agents. The software is marketed as a cloud service, but also for use on-premises or hybrid infrastructures.

For IBM, Confluent represents the third major acquisition in the open-source segment after Red Hat and Hashicorp. The direction – of course – is Artificial Intelligence. In this specific case, it is primarily about supplying generative and agentic AI with the data distributed across public and private clouds, data centers, and countless technology providers. Confluent's real-time data and event streaming capabilities, combined with AI infrastructure software and automation offerings from Hashicorp and partly Red Hat, are intended to complete IBM's offering. The integration of the streaming platform into the new owner's portfolio is also expected to lead to synergies of around 500 million dollars in operating costs. IBM expects an increase in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in the first full fiscal year after the transaction is completed.

(dmk)