Sun Microsystems stockholders will get their chance to vote on Oracle's proposed $7.4 billion acquisition when they meet July 16 at Sun's Santa Clara, Calif., campus. The deal would end more than seven months of negotiations between Sun and several interested suitors-including Oracle, IBM and HP-vying for Sun. Oracle CEO Larry Ellison has said his company will continue to invest in Sun's Java technology, but there are questions around the future of Sun's hardware business.
Sun Microsystems stockholders will vote next month on the proposed $7.4
billion acquisition by Oracle.
Sun officials announced June 8 that the stockholder meeting will be July 16
at the company's Santa Clara, Calif.,
The deal, which would make Sun a wholly owned subsidiary of Oracle, is
expected to close sometime this summer, Sun officials said in a proxy statement
filed with the federal Securities and Exchange Commission in conjunction with
the stockholder meeting notice.
The completion of the deal would end more than seven months of negotiations
around the future of Sun, which has lost billions of dollars over the past
decade since the dot-com bust, despite the company's efforts to revive its
fortunes through such pursuits as embracing x86 hardware architectures and its
aggressive push into the open-source space.
In the SEC filing, Sun officials said the deal with Oracle was the best way
to protect the company and its stockholders. Sun was being hurt more than its
competitors by the global recession because of the large number of financial
services firms that are Sun customers, and because Sun relied more heavily on
fewer-and larger-customers than many of its rivals. They also said that other
vendors used their size and larger services capabilities to squeeze Sun, and
that Sun was hampered by its lack of product diversity and narrow portfolio of
"Sun has made investments in new initiatives intended to lead to higher
growth, such as Sun's open source software solutions and the convergence of
servers, storage and networking enabled by Sun's Solaris operating system, but
these investments have not generated revenues sufficient to meaningfully offset
declines in legacy businesses-declines which have accelerated during the
current economic downturn," Sun officials said in the proxy statement.
In that and other filings with the SEC, Sun officials have outlined months
of negotiations with Oracle and two other companies that showed interest in
buying Sun or parts of the company. Though Oracle has been the only suitor
identified in the filings, sources have told eWEEK that the other two were IBM
According to the filings, Sun was first approached on Nov. 6, 2008, reportedly by IBM.
Negotiations with IBM heated up earlier this
year, but hit a snag on issues such as Sun officials seeking a guarantee that IBM
would work to complete the transaction even if there were federal antitrust
concerns. Eventually Sun's board of directors approved the sale of the company
to Oracle April 19.
will give Oracle
the ability to compete with the likes of IBM,
HP and Cisco Systems in offering more complete solutions to data center
Oracle CEO Larry Ellison and Scott
McNealy, chairman and co-founder of Sun, took the stage at Sun's JavaOne
Conference June 2. Ellison pledged that Oracle would continue to invest
heavily in Java
, but neither he nor McNealy would address the future of
Sun's hardware business.
Some analysts have speculated that Oracle might want to sell the hardware
business to someone else, though Ellison said soon after the deal was announced
that he intends to keep Sun's hardware, which includes servers, workstations
and storage devices.
Industry observers mostly have applauded the deal, though some stockholders
have filed class-action
, claiming the $7.4 billion is too low a number for Sun.