IBM Close to Buying Sun Microsystems for 7 Billion

Apparently, the talks between International Business Machines Corporation (IBM) and Sun Microsystems, Inc., which were going on during the last few weeks, are in their finalizing stages. Reportedly, I.B.M. is offering $9.50 a share which would value Sun at close to $7 billion.

Sun is well known for its Java technology platform, the Solaris Operating System, the MySQL database management system, Sun StorageTek storage solutions, the UltraSPARC processor, and for being one of the largest sellers of servers.

There could be quite a few far-reaching consequences because of this acquisition:

"I.B.M.'s acquisition of Sun would disrupt that long partnership with Oracle. I.B.M. could also undercut Oracle by more actively promoting the free MySQL software, which has become the most popular database software with Internet companies.

Hardware inherited from Sun could present antitrust concerns. I.B.M. faces an antitrust complaint from T3 Technologies over its dominance in the mainframe market. By buying Sun, I.B.M. would gain close to total control over robotic tape storage devices used to file data on mainframes.

Sun has a sales and technology partnership with Fujitsu for the sale of Unix servers. If I.B.M. buys Sun, Fujitsu and Hewlett-Packard will be the combined company's only major competitors in the Unix market, a possible concern for regulators here and in Europe. Sun faces a patent infringement lawsuit from the storage maker NetApp and has countersued. NetApp has a sales pact with I.B.M."

As an early result, shares of I.B.M. rose more than 3 percent on Thursday, to $100.82, while Sun's shares rose more than 2 percent, to $8.21. [via New York Times]