Forced buyout - practice and major + / - for minority shareholders in USA

Question

I just read https://www.redhat.com/en/about/press-releases/ibm-acquire-red-hat-completely-changing-cloud-landscape-and-becoming-worlds-1-hybrid-cloud-provider

IBM (NYSE:IBM) and Red Hat (NYSE:RHT), the world’s leading provider of open source cloud software, announced today that the companies have reached a definitive agreement under which IBM will acquire all of the issued and outstanding common shares of Red Hat for $190.00 per share in cash, representing a total enterprise value of approximately $34 billion.

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The acquisition has been approved by the boards of directors of both IBM and Red Hat. It is subject to Red Hat shareholder approval. It also is subject to regulatory approvals and other customary closing conditions.

So now it rang two questions:

1) There going to be a definitive forced buyout as stocks are publicly traided. Or is it not? How minority shareholders of Red Hat (or similar bought companies) view such things in US? What clauses of what laws govern terms and conditions?

2) Doesn't deal need approval of shareholders of IBM? Is it such small deal for them? What are criteria for need for shareholders appovals of large deals in USA?

Answer 1

If more than 50% of Red Hat shareholders vote to approve the buyout, then the deal will proceed. The minority shareholders are forced to sell their shares at the offer price even if they didn't want to.

IBM shareholders do not need to approve the deal. Only Red Hat shareholders must agree because they're the ones being forced to sell their shares at the offer price.