Report: IBM in Talks to Buy Sun Microsystems

News
By Jane McEntegart
published

Several reports today say that IBM is in talks to purchase Sun Microsystems for a rumored $6.5 billion dollars.

In what would be the biggest acquisition in IBM’s history (currently the largest buyout was its acquisition of Cognos last year), the Wall Street Journal reports that the offer values Sun at close to double the company’s $4.97 share price at close yesterday. The Journal detailed (citing sources close to the matter) that the two are in talks and a deal may not come of it.

According to Bloomberg, Sun shares today jumped at the news, going from $3.27 to $8.24 at 9:31 a.m. New York time in Nasdaq Stock Market trading. Earlier the stock surged as much as 69 percent, representing the most since Sun’s 1986 initial public offering. IBM declined $2.94 to $89.97 on the New York Stock Exchange.

So what would a merger like this mean? Acquiring Sun would obviously help IBM enlarge its lead in the server market. That aside, as analysts pointed out to the NYT, a combination of the two would bring together two technology companies that would collectively boast $9 billion a year in research and development funds. During times when everyone else is scrimping and saving, these two are investing in the future.

While IBM would not comment on the rumors about a deal, Sun’s chairman, Scott McNealy, told the NYT in a rather cryptic email, “As always, I don’t comment on rumors, no matter how accurate or silly they may be.” Hmmm.

Sources:
NYT
Bloomberg
Wall Street Journal

Jane McEntegart
9 Comments Comment from the forums
  • jsloan
    the sun is setting.

    they should buy them, then fire them for pissing away of billions of investor's dollars.
    Reply
  • Tindytim
    I wonder what that would mean about the feature of SPARC. With so much engineering talent all grouped together, I bet we'd see quite a few new processor technologies.
    Reply
  • jsloan
    TindytimI wonder what that would mean about the feature of SPARC. With so much engineering talent all grouped together, I bet we'd see quite a few new processor technologies.
    sparc will be added to ibm's product line.

    if you go to ibm's website you see that is basically what they do when they aquire someone. basically it will be become ibm sparc.

    they will continue to support it while there is a market. they will continue to evolve it, develop it, ect...

    the bigger question is for solaris, ibm will want to have aix for sparc.

    big changes are in stored for java and netbeans. it will be ibm java and ibm netbeans. hopefully netbeans and eclipsed merged. so we will see an improved eclipse with mattisse visual editor

    ibm has a long history of commitment to it's hardware, software, applications and services it provides. with the fall in value of sun stock they have not had the capital to do big things with java and netbeans. it's been sad, not having java keepup with microsoft and .net now they can, they will have the money, a company committed to creating great products and excellence now they have a lot of good ibm software developers to evolve the language, to do the things that sun could not afford or not envisioned. i do feel bad for some of the sub employees who will not be able to hangle the culture shock, i mean from sun hippies in tshirts, shorts and sandles high on weed who don't show up to work or come in after lunch because they were playing or smoking some shit well past midnight to ibm professionals in suites who come in on time ready to play. microsoft needs to watch out.
    Reply
  • cruiseoveride
    Arent there some serious anti-trust issues here? Am i the only person who thinks this is a really bad idea?

    IBM will become the next Microsoft at this rate.
    Reply
  • Blessedman
    IBM already is a giant, I would go as far to say that Microsoft could only dream of being IBM one day.
    Reply
  • Dmerc
    I wonder what will happen with Sun's open source software like Virtual Box and Open Office?
    Reply
  • jsloan
    i hear virtual box and open office are winners that ibm would love to have, can you say ibm virtual box, ibm open iffice, personally i think that good software like virtual box, open office, java, ect may benefit from being handled by ibm. then again it maybe the kiss of death through neglect. it's hard to tell, the first thing is what will happen with all the developers that are left, there will be culture shock, politics, reshuffling, reoganizing, if too many people leave it maybe over for all these products, just visit the ibm website and look for some of the products that ibm has acquired. then again if the developers stay and the pool of ibm developers join in whole heartedly then it may be a good thing, microsoft needs to watch out, they me have the ibm running after it with a comprehensive product line, all these products for free or cheap in cheap ibm boxes, laptops, desktops, ect. microsoft software need not apply, microsoft may need to get in hardware biz or lower its prices which equates to it having less money..., lowers it's stock price. ibm could control the whole thing, from cpu, ect...
    Reply
  • crymsonpheonix
    IBM has great open-source support. My hope, and money, rides on IBM making JAVA an open source offering, continueing support for SPARC and VirtualBox, as well as making VirtualBox more friendly to the community that uses it. to IBM open source is like having unpaid developers. the only question is what they will/would do with Solaris. on the one hand Solaris is readily availible on HP and Sun server hardware, and it has an opensource side and the ZFS file system (I hope they'll open-source that too), and is dependable and secure, whereas I can't think of anyone but IBM who uses AIX, and even they use other things too, like SUSE Linux for one.
    Reply
  • Gone will be our free Java programs?
    Reply