DOJ Gives Antitrust Blessing to Oracle-Sun Deal

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

Chris Preimesberger is Editor of Features & Analysis at eWEEK, responsible in part for the publication's coverage areas. In his 10 years and more than 3,500 stories at eWEEK, he has distinguished...