Oracle to buy Sun Microsystems in $7.6bn deal

Business software company Oracle has said it has “transformed the IT industry” today with its acquisition of Sun Microsystems for $7.4 billion (£5.1 billion).

Oracle is to pay $9.50 in cash for each Sun share and follows the withdrawal of $9.40-a-share offer for Sun earlier this month after International Business Machines abandoned talks with the company.

Sun, the computer hardware and software maker based in Silicon Valley, California, was a high-flyer during the dot-com boom but many analysts believe it never fully recovered after the bubble burst. It has manufacturing facilities in Hillsboro, Oregon and Linlithgow, Scotland.

Commenting on the deal, Oracle’s CEO Larry Ellison said: “The acquisition of Sun transforms the IT industry, combining best-in-class enterprise software and mission-critical computing systems. Oracle will be the only company that can engineer an integrated system – applications to disc – where all the pieces fit and work together so customers do not have to do it themselves.”

The deal has been unanimously approved by the board of Sun and the transaction is expected to be finalised this summer, following approval from shareholders and Government regulators.

Oracle shares were down almost 6%, while Sun’s gained 27% before the New York Stock Exchange opened.

According to Oracle, the takeover will boost its profits by more than $1.5 billion in the first year.

Sun was the developer of the Java software and created the Solaris operating system, which Oracle will have access to. It has a workforce of 33,000, while Oracle has a workforce of 86,000.

It is unknown whether any job losses will arise following the takeover.

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