April 20 (Bloomberg) -- Oracle Corp. agreed to buy Sun Microsystems Inc. for about $7.4 billion in cash, swooping in after the server makerâ€™s talks to be acquired by International Business Machines Corp. failed.
Oracle will pay $9.50 a share, 42 percent more than Sunâ€™s closing price on April 17. Oracle plans to make Sun a profitable part of its business and said the purchase will add $1.5 billion to operating earnings, excluding some items, in the first year.
The takeover moves Oracle, the worldâ€™s second-largest software maker, into the market for server and storage computers, pitting the company against IBM and Hewlett-Packard Co. Oracle Chief Executive Officer Larry Ellison also gains Sunâ€™s Java programming language and Solaris operating system, which work with its top-selling database program.
From the point of view of this happy little band (notably those using Oracle BI products), the acquisition of Solaris and Java may well be more interesting two or three years down the track than the hardware side of things.
However I grit my teeth regarding what this might mean for Sun's MySQL, which I was just starting to cut my teeth on, given that it would be a competitor for Oracle's bread and butter products.
â€œJava is the single most important software asset we have ever acquired,â€ Ellison said. Oracle will continue to expand the Java business, he said.
Hmmm... I thought that the bearded pillock might say that.
IBM was in takeover discussions with Sun in the past month, offering as much as $9.40, until negotiations broke down over price and terms, according to people familiar with the situation. IBM spokesman Ian Colley declined to comment today.
Sun probably couldn't find the three months necessary to read through all of the e-mails and snail mails needed to understand the Byzantine nuances of setting up an IBM customer account...