Oracle to buy Sun Microsystems for $5.6B

Oracle has announced today they will acquire Sun Microsystems at $7.4 billion ($9.50 per share), or $5.6 billion net of Sun’s cash and debt.

Oracle CEO Larry Ellison said today in a conference call, “With the acquisition of Sun, Oracle is now able to make all of the pieces of the technology stack fit together and work well,”

Oracle expects Sun to add $1.5 billion to non-GAAP operating profits for 2009, and $2 billion for 2010. 

Over the last year, Sun generated $13.3 billion in total revenue, but failed to net a profit, loosing $1.9 billion in the last year.

The acquisition will give Oracle access to Sun’s proprietary Java software that is used on about 1 billion computers worldwide.

Investors reacted favorably to the news, sending Sun’s stock price up about 40% today.

Sun Microsystems was in initial acquisition talks with IBM but quickly collapsed.

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Hercules holds a B.Comm Finance from Ryerson University in Toronto, Canada. He is a Chartered Financial Analyst (CFA) level 3 candidate. He was previously a contributor at FiLife, a finance website owned by Dow Jones and IAC. Write to [email protected]
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