DOJ Gives Antitrust Blessing to Oracle-Sun Deal

By Chris Preimesberger  |  Posted 2009-08-20 Print this article Print

Java licensing apparently was the reason federal due diligence in the Oracle acquisition of Sun Microsystems ran longer than anticipated. The $7.4 billion transaction still is not final, however. Closing is subject to other approvals, including clearance by the European Commission. However, industry analysts told eWEEK they do not expect this to be problematic.

Four months to the day after Oracle CEO and co-founder Larry Ellison announced Oracle's intent to acquire longtime enterprise IT partner Sun Microsystems for $7.4 billion, the U.S. Department of Justice on Aug. 20 officially sanctioned the deal as not threatening to break federal antitrust laws.

  The DOJ, the highest-ranking law enforcement agency in the United States, is empowered to study the potential abuse of antitrust law in corporate mergers and acquisitions-especially those involving multibillion-dollar companies such as Oracle and Sun.

The EC is the antitrust watchdog wing of the European Union. It will look closely at two key aspects of the merger: the Java networking software franchise and the enterprise parallel database business-two sectors in which Oracle will greatly increase its market share.

The DOJ took its time performing due diligence in this case, using several weeks more than originally had been expected to clear the transaction. Two months after the deal was announced, the DOJ extended its investigation, and it ultimately lasted two more months.

At the time of the due diligence extension, a Sun spokesperson told eWEEK that the company wasn't worried, and characterized the delay as simply an "irritation."

"This is not unexpected," said the spokesperson, who asked not to be identified. "The new administration is looking [more closely] at all mergers and acquisitions, by necessity. They're looking deeply into all aspects of the economy. This is too big a transaction for them to simply let go through on the first pass."

Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz

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