Oracle reels in Sun Microsystems with $7.4bn buy
Orasun? Sunacle? Suc(k)le?
Database giant Oracle has agreed to buy Sun Microsystems for $7.4bn, or $9.5 a share, in cash.
The surprise move comes in the wake of IBM walking away from a possible buyout of Sun Microsystems for $6.85bn.
Oracle said the boards of both the firms had given the transaction the thumbs up. It’s expected to complete this summer and is subject to shareholder approval as well as the normal regulatory requirements.
"The acquisition of Sun transforms the IT industry, combining best-in-class enterprise software and mission-critical computing systems," said Oracle CEO Larry Ellison.
"Oracle will be the only company that can engineer an integrated system - applications to disk - where all the pieces fit and work together so customers do not have to do it themselves. Our customers benefit as their systems integration costs go down while system performance, reliability and security go up."
“We expect this acquisition to be accretive to Oracle’s earnings by at least 15 cents on a non-GAAP basis in the first full year after closing,” said Oracle President Safra Catz, in a statement today.
“We estimate that the acquired business will contribute over $1.5bn to Oracle’s non-GAAP operating profit in the first year, increasing to over $2bn in the second year,” Catz said.
Today's announcement was sketchy, with little mention of what Oracle plans to do with Sun's hardware business, and no reference to Sun's MySQL's open source database.
In a message to Sun staff today, Jonathan Schwartz said: "This is one of the toughest emails I've ever had to write. It's also one of the most hopeful about Sun's future in the industry."
He said: "Oracle's interest in Sun is very clear - they aspire to help customers simplify the development, deployment and operation of high value business systems, from applications all the way to datacenters. By acquiring Sun, Oracle will be well positioned to help customers solve the most complex technology problems related to running a business."
He added: "A combined Oracle/Sun will be capable of cultivating one of the world's most vibrant and far reaching developer communities, accelerating the convergence of storage, networking and computing, and delivering one of the world's most powerful and complete portfolios of business and technical software."
Ellison and McNealy were two of the prime movers behind the anti-Wintel coaliton which pushed the Network Computer. This was launched with much hoopla back in 1995. It's nice to know they've finally got there.®