After merger talks with IBM disintegrated, the price for Sun Microsystems (which started at $10 billion before being reduced by IBM from $10 a share to $9.40) finally ended at $7.4 billion -- with Oracle as the buyer. Under the deal today, Sun shareholders will get $9.50 a share.
Early reactions:
- S&P cuts ORCL to hold and left its price target at $20 saying, "While acquisition of the Java programming language and Solaris operating systems would offer strategic benefits, we are concerned about ORCL's entry into hardware and the impact it could have on operating margins. We think that the company can afford the transaction, but are concerned by operational challenges."
- CNET's Gordon Haff says the industry's structure is changing: "To get the bigger picture here you have to view it in the context of what's going on within the system vendor landscape more broadly. At the risk of overstating things, the system vendor landscape is being reconstituted into big, highly integrated companies that can do it all. This is how essentially all computer companies used to be, but that way of business gave way to the horizontal industry structure epitomized by the likes of Microsoft and Intel."
- Microsoft CEO Steve Ballmer told Reuters he was "very surprised" by the deal.
- Larry Ellison's storied buyout machine is still whirring.
The press release is here.
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