It was a matter of nickels and dimes that led two California tech giants, Oracle Corp., Redwood City, and Sun Microsystems, Santa Clara, to strike a bargain.
The two companies announced they have reached an agreement in which Oracle will buy Sun for $9.50 per share, totaling, $7.4 billion, or $5.6 billion net of cash and debt held by Sun, the companies have announced.
The Oracle bid price was a dime per share higher than the reported $9.40 price offered by IBM Corp., Armonk, N.Y., and which was rejected by Sun as too low earlier this month, but a nickel less than IBMs earlier, highest bid of $9.55, which IBM reportedly cut during the negotiations and was followed by an end of acquisition talks.
In a news release, Oracle President Safra Catz said that he expects the acquisition will add a $1.5 billion operating profit to Oracle operations the first year and $2 billion the second year. The deal is expected to close sometime this summer, subject to regulatory approvals, the companies statement said. Both Oracle, whose flagship product is the Oracle database software, and Sun, one of the largest vendors of servers and a prominent supporter of open-source software, are major players in the healthcare information technology market.