Oracle Acquires Sun Microsystems

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Oracle Corporation and Sun Microsystems announced that they have entered into a definitive agreement under which Oracle will acquire Sun common stock for $9.50 per share in cash...

Oracle Corporation and Sun Microsystems announced that they have entered into a definitive agreement under which Oracle will acquire Sun common stock for $9.50 per share in cash. The transaction is valued at approximately $7.4 billion, or $5.6 billion net of Suns cash and debt. We expect this acquisition to be accretive to Oracles earnings by at least 15 cents on a non-GAAP basis in the first full year after closing. We estimate that the acquired business will contribute over $1.5 billion to Oracles non-GAAP operating profit in the first year, increasing to over $2 billion in the second year. This would make the Sun acquisition more profitable in per share contribution in the first year than we had planned for the acquisitions of BEA, PeopleSoft and Siebel combined, said Oracle President Safra Catz.

The acquisition of Sun transforms the IT industry, combining best-in-class enterprise software and mission-critical computing systems, said Oracle CEO Larry Ellison. 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.

There are substantial long-term strategic customer advantages to Oracle owning two key Sun software assets: Java and Solaris. Java is one of the computer industrys best-known brands and most widely deployed technologies, and it is the most important software Oracle has ever acquired. Oracle Fusion Middleware, Oracles fastest growing business, is built on top of Suns Java language and software. Oracle can now ensure continued innovation and investment in Java technology for the benefit of customers and the Java community.

The Sun Solaris operating system is the leading platform for the Oracle database, Oracles largest business, and has been for a long time. With the acquisitio

n of Sun, Oracle can optimize the Oracle database for some of the unique, high-end features of Solaris. Oracle is as committed as ever to Linux and other open platforms and will continue to support and enhance our strong industry partnerships.

Oracle and Sun have been industry pioneers and close partners for more than 20 years, said Sun Chairman Scott McNealy. This combination is a natural evolution of our relationship and will be an industry-defining event.

This is a fantastic day for Suns customers, developers, partners and employees across the globe, joining forces with the global leader in enterprise software to drive innovation and value across every aspect of the technology marketplace, said Jonathan Schwartz, Suns CEO, From the Java platform touching nearly every business system on earth, powering billions of consumers on mobile handsets and consumer electronics, to the convergence of storage, networking and computing driven by the Solaris operating system

and Suns SPARC and x64 systems. Together with Oracle, well drive the innovation pipeline to create compelling value to our customer base and the marketplace.