Bladewatch.com

The Times

Shares in Sun Microsystems almost doubled yesterday amid reports that IBM, the huge computer technology company, was in talks to buy the high-tech company for nearly $7 billion (£5 billion).

The merger, if completed, would be the largest acquisition in the history of IBM, surpassing its $4.9 billion purchase of Cognos, a Canadian business software company, last year. It could also prompt an antitrust challenge in the United States because a combined IBM and Sun would have a 42 per cent share of the computer server market.

News of the talks, first reported in The Wall Street Journal, sent Sun shares soaring by almost 80 per cent to $8.89 in New York. IBM, known in the industry as Big Blue, was mostly flat, closing 1 per cent lower at $91.95 yesterday. Both companies declined to comment on suggestions that a merger could happen as early as this week.

IT will be interesting to see how this story develops, what value proposition is being offered to either side, the deal might further IBM’s exposure to Sun’s target market, as well as enable IBM to generate further opportunities and revenue from Sun’s open source products and businesses; MySQL being an example.

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