On Mon, Apr 20, 2009 at 5:25 AM, Christopher Kiagiri <ck@google.com> wrote:

M&A is the name of the game ...


http://www.nytimes.com/2009/04/21/technology/companies/21sun.html?_r=1&ref=business

Oracle Agrees to Acquire Sun
By ASHLEE VANCE
Published: April 20, 2009

The Oracle Corporation, the technology information company, announced
Monday that it would acquire a rival, Sun Microsystems, for $9.50 a
share, which would value the transition at $7.4 billion.

The deal with Oracle came about two weeks after I.B.M. ended its talks
with Sun. The Sun board balked at that deal after I.B.M. lowered its
offer to $9.40 a share from $10. Still, Monday’s deal represented a 42
percent premium over Sun’s closing price of $6.69 on Friday.

Oracle and Sun said in a statement that net of Sun’s cash and debt,
the deal was valued at $5.6 billion.

Sun’s directors have unanimously approved the transaction. It is
anticipated to close this summer, subject to Sun stockholder approval,
certain regulatory approvals and customary closing conditions, the
companies said in a statement.

Oracle said it expected the purchase to add at least 15 cents a share
to its adjusted earnings in the first year after the deal closes. The
company also estimated that Sun would contribute more than $1.5
billion to Oracle’s adjusted profit in the first year and more than $2
billion in the second year.

Sun shares rose as high as $9.20 in premarket trading after closing
Friday at $6.69, while Oracle shares fell as low as $18.34 after
closing Friday at $19.06.

A Oracle-Sun deal disrupts the traditional relationships formed
between some of the technology industry’s largest players.

Oracle, for example, has long-standing partnerships with Sun’s rivals,
including Hewlett-Packard and Dell. These sellers of server computers
work to fine tune Oracle’s database and business software for their
computers.

I.B.M., which competes against Oracle in the software market, also
comes under new threats with the deal.

For years, I.B.M. has used it homemade servers as leverage for selling
higher-profit database and business software. With Sun, Oracle opens
up the same opportunity and gains access to thousands of existing Sun
customers.

In addition, Oracle has now obtained the MySQL database, which Sun
acquired last year for $1 billion. The open-source software has proved
popular with companies looking to expand their Internet operations.

Last year, Oracle began a flirtation with the hardware market. It
started reselling a server computer from H.P. that relied on its
software for managing and analyzing large volumes of data.