Oracle acquires Sun Microsystems

Oracle Corporation, an enterprise software company, has acquired Sun Microsystems, Inc., a provider of network computing infrastructure solutions. Both the companies are based in the US.

Update on January 21, 2010:

Oracle has received clearance from the European Commission to acquire Sun Microsystems.

Update on August 20, 2009:

Oracle has received clearance from the US Department of Justice to acquire Sun Microsystems.

Update on July 16, 2009:

The shareholders of Sun Microsystems have approved the company's proposed acquisition by Oracle.

Announcement (April 20, 2009):

Oracle has entered into a definitive agreement to acquire Sun Microsystems at a price of $9.5 per share in cash. The transaction is valued at approximately $7,400 million or $5,600 million net of Sun Microsystems' cash and debt.

The offer price represents a 42% premium to the closing price of Sun Microsystems common stock on April 17, 2009.

Kohlberg Kravis Roberts & Co. L.P. (KKR), a US-based private equity firm, through its fund KKR Private Equity Investors (KPE) made a $700 million investment in Sun Microsystems in January 2007 in the form of convertible notes. KPE might get at least $350 million when the deal closes.

The Board of Directors of both the companies have approved the transaction. The transaction is expected to close at the end of 2009.

Credit Suisse Securities (USA), LLC is acting as the financial advisor, while Allen & Overy LLP is acting as legal advisor to Sun Microsystems. Clifford Chance LLP and Latham & Watkins LLP are acting as legal advisors to Oracle.

Deal Value (US$ Million) 7400
Deal Type                Acquisition
Sub-Category             Majority Acquisition
Deal Status              Completed: 2010-01-27

Deal Participants

Target (Company)   Sun Microsystems, Inc.
Acquirer (Company) Oracle Corporation
Vendor (Company)   Undisclosed Vendors

Deal Rationale

The acquisition of Sun Microsystems combines enterprise software and computing systems, which will enable Oracle to engineer an integrated system - applications to disk - that will result in lowering systems integration costs to its customers. The transaction also adds two key Sun Microsystems software assets: Java and Solaris to Oracle portfolio.

Bid Premium ($ per share) 42

Related terms: acquisition, advisor, debt, investment, java, legal, Private Equity, securities, software