Oracle agrees to buy Sun for $7.4B
- 20 April, 2009 22:10
Oracle to buy Sun Microsystems for $US7.4 billion
Oracle has signed a deal to purchase Sun Microsystems for US$7.4 billion, plunging the enterprise software vendor into the hardware market and making Sun the latest company to be subsumed by the Silicon Valley giant.
Oracle will pay $9.50 per share in cash for Sun, or $5.6 billion net of Sun's cash and debt, according to Oracle.
The move follows Oracle's purchases of a raft of companies in the last few years, including Siebel, PeopleSoft and BEA Systems.
The deal comes after Sun reportedly walked away from an offer from IBM a few weeks ago. Though there were rumors Oracle might purchase Sun, it has never before had a hardware or server OS business, a market in which a significant amount of Sun's assets are tied, so the deal seemed unlikely.
However, Sun's Solaris long has been a successful platform for Oracle's database business.
Oracle said the Sun deal should bring the company more revenue in the first year than the company planned for its acquisitions of BEA Systems, PeopleSoft and Siebel combined.
Sun should contribute $1.5 billion to Oracle's non-GAAP operating profit in the first year, a number that will increase to more than $2 billion in the second year, the company said.