From Novell to $6 Billion: Behind Reuters’ Latest SUSE Sale Report

EQT’s rumored plan to sell SUSE for up to $6 billion didn’t come out of nowhere. We trace the story from Novell and Microsoft to today’s anonymous‑source whispers.

Wowie zowie! According to Reuters, SUSE might be for sale… again. Then again, it might not.

If it’s true, this time it’s not going to treated like a red-headed stepchild the way it was after its owner Novell was acquired by Attachmate Group, which largely neglected it. That neglect continued through Attachmate’s merger with Micro Focus, and lasted until 2019 when SUSE was purchased for about $2.5 billion by the Sweden-based private equity firm EQT AB as a stand-alone company.

That’s when SUSE became an independent identity again, with more control over its destiny.

The Novell Connection

SUSE troubles actually began when it initially lost its independence in 2004, after it was purchased by Novell for about $210 million. From the onset, that deal was destined to not turn out well for the distro, which was older than Red Hat and had been considered to be Linux’s crown jewels due to advanced tooling, such as YAST, which made it relatively easy to set up and maintain.

Novell purchased the distro in a desperate attempt to turn itself into an open source company — something it knew nothing about — after its proprietary networking business went into rapid decline after easy-to-use networking capabilities were added to Windows 98.

Novell treated SUSE as a wholly owned division and moved the company from Germany to the US. Two years after the purchase, the SUSE-Novell combination lost virtually all credibility as an open source company after Novell cut a deal with Microsoft, which at the time was openly attempting to destroy both Linux and open source through a combination of FUD attacks and patent threats.

The deal, which effectively gave SUSE something akin to “most favored Linux” status, was seen as particularly contentious in many open source circles. In exchange for free SUSE support coupons that Microsoft could distribute to customers who also ran Linux, Redmond agreed not to sue SUSE’s enterprise customers over patent issues.

Not only did this give SUSE users an advantage that users of other Linux distros didn’t have, many open source advocates thought it violated terms of Linux’s open source GPL license.

Life Under EQT

At the time of SUSE’s purchase by EQT, the distro had long since moved back to its native Germany. Under Attachmate and Micro Focus’s ownership, the distro had become dependent on business supplied by the Germany-based software giant SAP, which had optimized its business software platform for SLE, SUSE’s flagship Linux distribution, which brought a large number of enterprise users to SUSE. Apparently to reassure SAP and keep them onboard, almost immediately after the sale, EQT hired Melissa Di Donato, SAP’s chief operating officer, as CEO.

Under EQT, SUSE started to get the attention it deserved. In 2020, less than a year after Di Donato took over as CEO, it acquired the US-based Kubernetes- and container-focused Rancher Labs for about $600 million, which helped bring the company’s offerings more in line with Red Hat, its biggest competitor.

It wasn’t all smooth sailing, however. Two years after the purchase, in 2021, EQT attempted to cash in by taking the company public, expecting to see a 7-8 billion euro valuation at the IPO’s close. By just about everybody’s measure, the IPO was disappointing, and SUSE ended up with only around a 5 billion euro market cap.

In May, 2023 Di Donato was out. Officially, she resigned in March, with her successor being announced almost immediately, seeming to some as if he’d been waiting in the wings for Di Donato to be shown the door.

The successor was Dirk-Peter van Leeuwen, who brought to the table more than 18 years experience at Red Hat in various VP roles in Europe and Asia. He also spent time on the US West Coast working in open source for the likes of the original Santa Cruz Organization in California, so he brought more than a bit of open source business gravitas to the job.

A few months after van Leeuwen came onboard, EQT took the company private again, where it’s seemingly been doing well. Most estimates put the private company’s revenues in the $700-$800 million range, with earnings before interest, taxes, depreciation, and amortization at about $250 million.

Rumored Sale; Rumored Details

So far, Reuters’ story about SUSE being for sale again belongs in the “two people familiar with ‌the matter” category. When FOSS Force reached out to our contacts at SUSE for confirmation or denial, we were told, “SUSE doesn’t comment on speculation.”

Reuters’ wording isn’t that there is a buyer, or that a sale is imminent, but that “EQT AB is exploring a sale of open-source software company SUSE in a deal that could ​value it up to $6 billion.” In other words: all of the above and none of the above are both covered.

Considering that the company was valued at about $2.96 billion when EQT took it private in 2023, $6 billion would represent roughly a doubling in value in about three years. Nice work if you can get it.

According to Reuters, EQT has hired Arma Partners, a London-based investment bank, to “sound out” a group of private equity investors — with no information on who initiated these under-the-table talks.

Reuters points out that even though the last year or so hasn’t been a bull market for software stocks, because of market uncertainty on the effect that artificial intelligence will have on traditional software vendors, SUSE might be well positioned due to its efforts to optimize its stack for AI workloads, which increasingly needs an operating system and supporting infrastructure designed with AI in mind.

During the last year or so the company has announced a long list of accomplishments in AI space that includes:

• Branded and packaged a “SUSE AI” stack on top of Rancher/Rancher Prime for running AI and LLM workloads on Kubernetes.
• Added LLM inference support (e.g., via vLLM) so customers can run large language models more efficiently on their own clusters.
• Introduced agentic AI features in Rancher Prime (an AI assistant/“ops copilot” to help manage and troubleshoot Kubernetes).
• Delivered AI observability tools to monitor AI services and pipelines (metrics, logs, tracing for common AI components).
• Shipped GPU‑sharing/virtual cluster features so teams can more easily share GPU capacity for AI projects.
• Updated NeuVector/Kubernetes security to explicitly cover containerized AI/ML workloads.

Also, in an era when the US is growing increasingly less dependable and trustworthy in all areas, including security and trade, SUSE’s European location — and its understanding of the European market — might make the company more valuable from a digital sovereignty perspective. This could especially become true if EU-based Red Hat customers grow wary of the company’s close proximity to IBM and start looking for a more Eurocentric solution.