Oracle gets approval to buy SUN Microsystem
Oracle on 20th August , 2009 announced that it got approval to acquire Sun Microsystems. The Department of Justice [ DOJ, United states ] has approved Oracle’s plan to buy Sun Microsystems, this Thursday.
Oracle acquired Sun for $9.50 per share in cash, in common Stocks. This approval is more anticipated one by Oracle, as DOJ in June said it need more time for investigation but the deal gets approved on August itself.
“We expect this acquisition to be accretive to Oracle’s earnings by at least 15 cents on a non-GAAP basis in the first full year after closing. We estimate that the acquired business will contribute over $1.5 billion to Oracle’s non-GAAP operating profit in the first year, increasing to over $2 billion in the second year.
This would make the Sun acquisition more profitable in per share contribution in the first year than we had planned for the acquisitions of BEA, PeopleSoft and Siebel combined,”
- Said Oracle President Safra Catz
Oracle Wins the race as IBM has backed its deal of buying Sun. Oracle has agreed to buy Sun Microsystems for $7.4 billion and the transaction valued at $7.4 billion or $5.6 billion of Sun’s cash and debt. This debt is very high for Oracle , as Sun doesn’t perform well in its last quarters. Also the integration of Sun will be a tough task for Oracle.
“Oracle and Sun have been industry pioneers and close partners for more than 20 years. This combination is a natural evolution of our relationship and will be an industry-defining event.”
- Said Sun Chairman Scott McNealy
The Bottom Line :
This deal is very useful for Oracle because it uses Java technologies for most of its products. Let us sit and watch what happens next to Sun.
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