Oracle agreed to acquire Sun Microsystems for $7.4 billion in cash. Oracle will pay $9.50 per share of Sun stock, a 42% premium over Sun's closing stock price the previous Friday. The deal will strengthen Oracle's position against IBM in the software and hardware industries. It gives Oracle a strong operating system in Solaris and access to Sun's hardware products and 33,000 employees. Analysts said the acquisition was unexpected but could make sense for Oracle's business.

1. BBC NEWS | Business | Oracle in $7.4bn deal to buy Sun http://newsvote.bbc.co.uk/mpapps/pagetools/print/news.bbc.co.uk/2/hi/bu...
Oracle in $7.4bn deal to buy Sun
Business software manufacturer Oracle has said it is to acquire computer hardware and
software maker Sun Microsystems for $7.4bn (£5.1bn).
Oracle is to pay $9.50 in cash for each Sun share, it said.
Oracle said the buy "transforms the IT industry, combining best-in-class enterprise software and mission-
critical computing systems".
Oracle shares were down 5.56% and Sun's were up 27% in trading before the open of the New York Stock
Exchange.
The offer of $9.50 per share represents a 42% premium over Sun's closing stock price on Friday.
'Natural evolution'
The deal comes a month after IBM abandoned its bid to buy Sun.
“ The deal would strengthen Oracle's position against IBM ”
Computer industry analyst Robert Jakobsen
"Oracle and Sun have been industry pioneers and close partners for more than 20 years," said Sun
chairman Scott McNealy.
"This combination is a natural evolution of our relationship and will be an industry-defining event."
Sun said its board of directors had unanimously agreed the deal, which is expected to be completed this
summer after approval from shareholders and government regulators.
'Interesting acquisition'
Computer industry analyst Robert Jakobsen said he was initially "a little bit surprised".
"It could make sense," he added.
"The deal would strengthen Oracle's position against IBM. Oracle has done a good job on acquisitions it
has done earlier."
Oracle said the takeover of Sun would boost its profits by more than $1.5bn in the first year, and by $2bn
in the second.
However, Sun made a loss of $1.9bn over the past 12 months, despite sales totalling $13.3bn.
Fellow computer industry analyst Shannon Cross, said it was "a very interesting acquisition".
"It gives Oracle a very strong operating system. It gets hardware, which should be interesting to see
since Oracle doesn't make things.
"It's going to give them access to customers who weren't using the Oracle database."
Job cuts?
Although best known for its computer servers, Sun was also the developer of the Java programming
language, and created the Solaris operating system.
Sun currently employs 33,000 people, while Oracle's workforce totals 86,000.
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2. BBC NEWS | Business | Oracle in $7.4bn deal to buy Sun http://newsvote.bbc.co.uk/mpapps/pagetools/print/news.bbc.co.uk/2/hi/bu...
The firms have yet to comment on whether any redundancies will be made following the completion of
the takeover.
Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/8008246.stm
Published: 2009/04/20 14:03:02 GMT
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