Linux company SuSE was today acquired by Novell in a $210 million all-cash deal.

The transaction is subject to regulatory approval and the winding up of shareholder agreements. Novell expects the transaction to close by the end of its first fiscal quarter (January 2004).

Novell said the acquisition would expand its "ability to provide enterprise-class services and support on the Linux platform" by adding the open source expertise of SUSE Linux to its existing networking, security and consultancy portfolio.

Today’s acquisition follows Novell's August purchase of Ximian, a developer in Linux server management and desktop products, and further demonstrates Novell's commitment to Linux and the open source development model, the company said.

"We chose SuSE Linux because they are a clear market leader in Linux technology for the enterprise," said Jack Messman, chairman and CEO of Novell. "With this acquisition, Novell will be the only billion dollar software company with a Linux distribution and a worldwide ecosystem around it. A worldwide technical staff of over 600 has been trained to support Linux. The acquisition of SuSE Linux completes our technology stack from the desktop to the server."

"Novell is bringing our significant resources to bear to help customers adopt Linux with more confidence, giving them the freedom of choice Linux provides without the anxiety over whether an open source solution can truly be relied on for mission-critical functions," he added.

Novell also announced today that IBM intends to make a $50 million investment in Novell convertible preferred stock.

In addition, "Novell and IBM are negotiating extensions to the current commercial agreements between IBM and SuSE LINUX for the continued support of SuSE Linux on IBM's eServer products and middleware products" and for product and marketing support related to SeSE Linux.

Both of these agreements will be effective when the acquisition of SuSE by Novell is completed. ®

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