IBM → Confluent
IBM's $11bn all-cash purchase of Confluent, the company built around the open-source Apache Kafka streaming software, agreed in December 2025 and closed in March 2026 — a bet that enterprise AI agents need live data, and IBM's latest open-source purchase after Red Hat and HashiCorp.
An all-cash purchase at $31 a share of the Kafka-based data streaming vendor, aimed at supplying real-time data to enterprise AI systems.
- Value
- $11B
- Announced
- December 2025
- Completed
- March 2026
- Sector
- Technology
- Deal type
- acquisition
- Acquirer
- IBM (United States)
- Target
- Confluent (United States)
Why it mattered
Confluent was founded in 2014 by Jay Kreps, Jun Rao and Neha Narkhede, who had created Kafka at LinkedIn, and listed in 2021. By 2025 it had more than 6,500 clients, including over 40% of the Fortune 500. IBM argued that generative and agentic AI depend on trusted data moving in real time between clouds, data centres and applications, and presented the deal as building on its purchases of Red Hat ($34bn, 2019) and HashiCorp ($6.4bn, 2025).
The proxy statement shows how the price was set. Confluent and its adviser Morgan Stanley approached ten possible strategic buyers and nine financial sponsors; several declined, saying they could not offer a meaningful premium to a share price then in the low $20s. IBM proposed $27 a share on 30 October 2025 and raised it to $28 the same day, then to $29. Confluent's special committee said it would engage at $33 or more and set a floor of $31; IBM offered $31 on 11 November. The price, paid from IBM's cash, was about 35% above the 30-day average share price and gave an enterprise value of $11bn. Holders of about 62% of the votes signed voting agreements when the deal was announced on 8 December. The US antitrust waiting period expired on 12 January 2026, shareholders approved on 12 February and the deal closed on 17 March, ahead of schedule.
What it left behind
IBM's accounts put the total consideration at $11.6bn, of which $7.2bn was goodwill and $3.8bn identified intangibles, chiefly client relationships and technology; it also settled $1.1bn of Confluent convertible notes in April 2026. Confluent went into the Software segment, where Data revenue rose 18.9% in the second quarter of 2026, which IBM attributed mainly to Confluent, and software annual recurring revenue reached $24.6bn. IBM promised accretion to adjusted EBITDA within the first full year and to free cash flow in year two; as of September 2026 neither test had come due. The process is a reminder that when rival bidders fall away, a target board's leverage lies in naming a floor and holding it — Confluent's committee set $31 and got it.