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Apps & Software

European Commision May Kill Sun (JAVA) Deal With Oracle (ORCL)

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By Douglas A. McIntyre Updated Published
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magazinOracle (ORCL) probably thought its deal to buy Sun Microsystems (JAVA) was a sure thing once US regulators had approved the deal.

Now, the transaction is in real trouble and some experts believe it may never be closed at all. The European Commission may take several months to review it. A final decision will be about the breath of the investigation, but the EC says it is concerned about the dominance the combined operation could have in the open source server software business.

The setback for Oracle could be considerable. It is planning to buy Sun for $5.6 billion. Sun has been losing sales rapidly and its revenue dropped close to a third in its last reported quarter. Sun has been winding down its operations and an independent company and has assumed that it will no longer have to reports its financial results.

Sun also lost money in the last quarter.

According to recent data, Sun has 10% of the global server market which puts it well behind IBM (IBM) and HP (HPQ). Dell (DELL) even has a larger portion of the market. With its relatively small resource in sales and development, the value of Sun is dropping quickly. And, that makes the price Oracle is paying very high, particularly if it has to wait well into 2010 to get the acquisition closed.

Douglas A. McIntyre

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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