IBM Completes Rational Buyout

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IBM officials said Friday the company has completed its $2.1 billion cash acquisition of Rational Software.

The deal officially went through after markets closed Thursday afternoon, according to IBM, based here.

IBM first unveiled its intentions to buy Rational in December. At that time, Rational and IBM executives said Rational would continue to support Microsoft's .Net world view as well as J2EE, the enterprise application development framework IBM backs.

Along with Borland, Rational was one of two leading independent development tools vendors supporting both Java and Microsoft-oriented development before IBM's acquisition. In fact, the IBM deal sparked rumors of a Microsoft counter-move, either to outbid IBM for Rational or to acquire Borland. (See story.)

The completion of the IBM-Rational deal leaves Scotts Valley, Calif.-based Borland as the leading tools vendor without proprietary ties to larger software or hardware assets.

IBM officials said it plans to leverage Rational's platform-agnostic tools to support its e-business on-demand strategy, which aims to provide software and services based on customers' computing needs.

In December, IBM said Rational will become the fifth division and brand within IBM Software, joining Lotus, DB2, Tivoli and WebSphere. Rational President Mike Devlin will become general manager of this new division.

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