Best case scenario is that this turns out to be a reverse merger in disguise. RedHat is allowed to operate independently, and the successful/marketable IBM software is moved underneath their management. The Power, z, and enterprise storage hardware, which is profitable but not growing, then gets sold off to a buyer that is happy to milk the cow -- or even spun off, keeping the IBM name for itself. The remaining bits and pieces -- GBS, legacy on-prem software, whatever else is left -- get sold to various buyers probably in India.
And lo and behold, IBM has effectively sold the juicy bits of the company to Red Hat in a tax efficient way that makes the shareholders happy.
The big question is what will happen to the marquee "big bets" that have conspicuously not paid off, most notably Watson, Softlayer/IBM Cloud, and blockchain. This might be the opportunity to get out from under them, one way or another.
This was originally posted on another thread @VRN3pw4-tnq on the IBM board