Oracle to Acquire Sun Microsystems for Over $7 Billion in Surprise Deal

Strategic Insights -

Oracle Corp. has announced its plans to acquire Sun Microsystems Inc. for more than $7 billion, marking a significant move into the computer hardware market. The deal comes after Sun's talks with IBM fell apart, catching many Oracle watchers off guard. While analysts are uncertain about Oracle's ability to succeed in Sun's hardware unit, they believe the acquisition will boost profitability at Sun's software businesses.

Key Takeaways:

  • Oracle will pay $9.50 a share for Sun, valuing the company at approximately $7.06 billion, based on 743 million shares outstanding as of December 28.
  • Sun had previously rejected IBM's offer to pay up to $9.40 a share.
  • The acquisition will add at least 15 cents per share to earnings in the first full year after closing.
  • It will be more profitable on a per share basis in the first year than Oracle's previous purchases of BEA, PeopleSoft, and Siebel combined.
  • Sun's top-selling products are high-end servers and storage equipment.
  • Oracle and Sun have been partners for over 20 years, and Oracle's database and related software already operate tightly with Sun's Java software and Solaris operating system.

Statistics:

  • Oracle will pay $9.50 per share for Sun, with the acquisition valued at approximately $7.06 billion (based on 743 million shares outstanding as of December 28).
  • Sun had previously rejected IBM's offer to pay up to $9.40 per share.
  • Oracle expects the acquisition to add at least 15 cents per share to earnings in the first full year after closing.
  • Sun's top-selling products are high-end servers and storage equipment.
  • Oracle and Sun have been partners for over 20 years.

Sources:

  • Euclid Infotech Pvt. Ltd.
  • Syngigate.info an Albaawaba.com company