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Category: Technology Author : JR Posted: April 20, 2009
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Sorry, IBM: Oracle Buys Sun Microsystems


Oracle Sun AcquisitionFollowing broken-down talks for a buyout by IBM (IBM), Sun Microsystems (JAVA) has now agreed to an acquisition by Oracle (ORCL). The deal is expected to be finalized by the summer.

Oracle’s Sun Acquisition

Oracle will pay about $7.1 billion for Sun. That comes out to $9.50 a share — more than IBM’s $9.40 a share offer last month. Altogether, the transaction is valued at $5.6 billion, taking into account various debts. Sun’s board has given unanimous approval for the deal. It still requires a shareholder sign-off, however, as well as regulatory approval to go through.

Oracle and Sun have been partners for more than 20 years, with Oracle’s Fusion Middleware being built on Sun’s Java protocol and its database business using Sun’s Solaris operating system.

Oracle execs believe the deal will add a minimum of 15 cents a share to the company’s earnings, a projected gain of $1.5 billion in the first year. Already, Sun’s shares were up 36 percent in premarket trading. Oracle’s shares dropped 4.5 percent, while IBM went down by only about 1 percent.

Oracle-Sun Acquisition Analysis

The following Bloomberg video features more analysis on the Oracle-Sun acquisition and what it could mean for the market.

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Comments


2 Archived Responses to “ Sorry, IBM: Oracle Buys Sun Microsystems ”

  1. Kyle Brady
    Apr 20, 2009

    I think this is a better solution than IBM purchasing Sun. I'm actually going to write something on this, but here's a few takeaways:

    -IBM had whisperings of shutting down production on NetBeans, an opensource and supported-by-Sun IDE for many languages that is proving to potentially be the “Visual Studio” of the “languages that don't suck” world.

    -IBM has a history of not doing well with products they don't care much about… “ThinkPad”, anyone?

    -Oracle maintains a large swath of projects, most of which are interrelated… adding Java, the JVM, NetBeans, Solaris, etc. to the mix will probably result in better products all around. Although I wouldn't expect Solaris to stay alive much longer, Oracle isn't likely to see the value in producing something that's largely ignored.

    -Oracle also has a history of dealing better with open source projects, which bodes well for all those encapsulated under Sun. It would have been a travesty for IBM to fuck up the whole Java world, but with Oracle we can at least hope for the best.

    –Kyle

  2. adam hartung
    Apr 21, 2009

    Sun had no hope of survival by the late 1990s when McNeely Locked-in on selling “boxes” and stopped listening to the marketplace. Sun created huge value with Solaris and Java, but had no idea how to capture that value so it just kept doing what it always did. Eventually, the market didn't see the value in the boxes any more, and the value of Solaris and Java had been frittered away. A lesson for any company that it must adapt to market needs or it will be squashed. Read more at http://WWW.ThePhoenixPrinciple.com