Oracle's Acquisition of Sun Microsystems

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Case Details:

Case Code : BSTR336
Case Length : 18 Pages
Period : 2009
Pub Date : 2009
Teaching Note :Not Available
Organization : Oracle Corporation, Sun Microsystems
Industry : Information Technology and Related Services
Countries : US

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Introduction Contd...

Oracle, a software vendor, provides services like middleware, enterprise solutions, and database solutions. The major products of Sun include high-end servers, Solaris operating systems, Java programming language, and MySQL⁶. After the deal, Oracle would be able to offer its customers a complete system from database to disk which could result in savings to its customers. Commenting on the benefits of the deal, Oracle's CEO Larry Ellison (Ellison) said, "Oracle will be the only company that can engineer an integrated system - applications to disk - where all the pieces fit and work together so customers do not have to do it themselves. Our customers benefit as their systems integration costs go down while system performance, reliability, and security go up."⁷

Two weeks prior to Oracle's announcement of the deal, International Business Machines Corporation (IBM)⁸ terminated its talks for the acquisition with Sun as the two firms could not come to an agreement on several issues like price and change of management control. Oracle's offer for Sun was US$ 9.5 per share whereas IBM offered US$ 9.4 per share. The small difference in the bid price of Oracle and IBM drew the attention of several analysts to the deal...

Excerpts >>

6] MySQL is a relational Database Management System product of Sun Microsystems.
7] Jennifer LeClaire, "Oracle Will Buy Partner Sun Microsystems for US$ 7.4 Billion," www.newsfactor.com, April 20, 2009.
8] International Business Machines Corporation is the US-based multinational computer technology giant founded in 1889. It is head-quartered in Armonk, New York. For the fiscal year 2008, IBM reported revenues of US$ 103.6 billion and net income of US$ 12.3 billion.

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