Oracle bought Sun Microsystems for $7.38 billion, surprising International Business Machines, according to the Wall Street Journal.
Already spending more than 430 billion buying software rivals in recent years, Oracle interceded when talks between IBM and Sun stalled.
Sun’s board voted in favor of Oracle’s offer, which was viewed as less likely to face an antitrust challenge since there was little business overlap. IBM is highly unlikely to re-enter the bidding for Sun.
After factoring Sun’s cash and debt, the companies valued Oracle’s offer at about $5.6 billion. Sun shareholders will get $9.50 a share in cash. Sun’s stock surged 37 percent on the news of the acquisition to $9.15.
Sun was in the market to sell itself to a larger company as it struggled to compete with giants such as IBM, Hewlett-Packard, and Dell. Sun’s Java program, used to build software for websites and cell phones, is believed to be the greatest gain by Oracle’s CEO Larry Ellison. “[Java] is the single most important software asset we have ever acquired.”