IBM in Talks to Buy Sun Microsystems

March 18, 2009

ChattahBox)—The Wall Street Journal is reporting this morning that IBM is in talks with Sun Microsystems to acquire the California based server company for $6.5 billion, the largest potential acquisition in Big Blue’s history. Reports that IBM is courting the more than willing Sun Microsystems caused a healthy spike in Sun’s stock on the Frankfurt exchange by 61 percent to 6 euros. IBM’s current offer is said to double the current value of Sun’s stock, which closed yesterday in the U.S. exchange at $4.97 a share.  Sun who is taking a hit in this recession, is ready to post its third consecutive loss and is in the process of eliminating 6,000 jobs worldwide. Industry watchers say Sun CEO Jonathan Schwartz has been actively seeking a buyer for months now and he just may have snagged a great prospect for this match made in server heaven.

Businesses are buying fewer computer servers as the recession continues to dampen business expansion. Global sales are expected to shrink by 17 percent in the upcoming year. That means a larger company is better able to weather the economic storm that is surging all around the world.

IBM is anxious to expand to better compete with Hewlett-Packard and increase its presence in the computer server market. The $6.5 billion acquisition with Sun would be the biggest deal for IBM so far. Last year IBM shelled out $4.9 billion to acquire Cognos Inc. to give the company an edge over Oracle Corp.

As the battle of the remaining computer server titans continues, industry analysts expect all the shake-ups and mergers to whittle the players down to a handful. At the moment, besides IBM, Sun and HP, only Dell and Fujitsu Ltd remain as top players.


Comments

4 Responses to “IBM in Talks to Buy Sun Microsystems”

  1. Arthur Proulx on March 18th, 2009 2:23 pm

    I would love to see IBM swallow the SUN. Over the years I have invested in Sun Microsystems, but no longer own them…. IBM, where were you when I needed you???
    I do believe Sun would be a smart buy for IBM.

  2. Arthur Proulx on March 18th, 2009 2:26 pm

    I would love to see IBM swallow the SUN. Over the years I have invested in Sun Microsystems, but no longer own them…. IBM, where were you when I needed you???
    I do believe Sun would be a smart buy for IBM.

  3. Sue on March 18th, 2009 4:50 pm

    Hi Arthur:

    Thank you for your comment. So sorry to hear you no longer own Sun stock. It seems there are going to be quite a few mergers/acquisitions in the coming months as this shrinking market settles down. Stay tuned to ChattahBox for frequent business updates.

    Sue

  4. adam hartung on March 18th, 2009 11:04 pm

    IBM buying Sun is sooo last century. With Sun out of gas, who cares if IBM buys the company or it “winds down” like DEC. Doesn’t IBM have something innovative to do with all that money – like Apple and Google have?

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