Oracle to Acquire Sun Microsystems for $7.4 Billion
Why
Oracle Corp. agreed to buy Sun Microsystems Inc. for about $7.4 billion in cash, stepping in after International Business Machines Corp.'s talks to buy the server maker collapsed. The per-share price is $9.50, 42 percent more than Sun's closing price April 17. The acquisition probably will add $1.5 billion to Oracle's operating profit, excluding some items, in the first year, the companies said today in a statement. The acquisition will give Oracle Sun's Java technology and the Solaris operating system software. Oracle, the world's second-biggest software maker, has spent almost $34.5 billion on purchases since 2005, making it the most acquisitive software company in the world. IBM trails both Oracle and Microsoft Corp. in software sales. The company was in takeover discussions with Sun in the past month, with negotiations breaking down over price, according to people familiar with the situation. Sun's shares had gained almost 80 percent the day reports of the talks with IBM surfaced, only to drop 25 percent after the two sides stopped negotiating. Sun, based in Santa Clara, California, rose $2.51 to $9.20 in early trading after closing at $6.69 on the Nasdaq Stock Market on April 17. Oracle, based in Redwood City, California, dropped 91 cents to $18.15 after closing at $19.06 last week. Sun's Solaris operating system competes with Linux and Microsoft Corp.'s Windows software. Sun boosted software sales by 21 percent last quarter and said in January that it projects revenue from those products to reach about $600 million a year. That compares with Oracle's software sales of $17.8 billion in its latest fiscal year.
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References:
http://www.bloomberg.com/apps/news?pid=20601087&sid=awfGnLxcC8bk&refer=home,http://virtualizationreview.com/blogs/weblog.aspx?blog=3794,http://www.marketwatch.com/news/story/oracle-buy-sun-microsystems-74/story.aspx?guid=%7B4C2EAB6D-9C08-409E-B1C9-AAE8D11D63F6%7D&dist=msr_5,http://blog.wired.com/business/2009/04/oracle-sun-anno.html
