IBM in talks to buy Sun Microsystems: report

By Angsuman Chakraborty, Gaea News Network
Wednesday, March 18, 2009

SAN FRANCISCO - Technology giant IBM is in talks to buy rival Sun Microsystems for $6.5 billion, the Wall Street Journal reported Wednesday.

The deal would represent the largest purchase ever by IBM and signal the company’s determination to maintain a strong presence in the market for servers in the face of challenges from HP, Dell and Cisco.

News of the negotiations sent the long-languishing shares of Sun up by some 66 percent to $8.27 in early trading Wednesday. If the deal is finalised, it would represent a premium of 100 percent on Sun’s closing price of $4.97 Wednesday.

However the deal could face anti-trust scrutiny from the Obama administration. The combination of the two companies would create a new technology giant with 40 percent of the market for servers, and over 62 percent of the market for servers running the UNIX operating system.

A combination of IBM and Sun would also represent one of the largest technology research organisations in the world. The two companies’ combined research budget currently totals about $9 billion per year.

Sun has been struggling ever since the dot com crash of 2001, and last November, stunned by a $2-billion quarterly loss, it announced that it was cutting as many as 6,000 of its 33,000 workers over the next year.


adam hartung
March 19, 2009: 5:17 am

IBM buying Sun is sooo last century. With Sun out of gas, who cares if IBM buys the company or it “winds down” like DEC. Doesn’t IBM have something innovative to do with all that money - like Apple and Google have?

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