|
The latest obstacle in Oracle’s $7.4 billion bumpy path to acquire Sun Microsystems involves gaining antitrust clearance in Russia.
Oracle, which is awaiting clearance from the European Commission to close its long-delayed proposal to acquire Sun, was forced to withdraw an application to obtain antitrust approval from the Russian Federal Antimonopoly Service on Oct. 29, according to published reports. According to an article in The Wall St. Journal, the Russian antitrust body requires that companies have a maximum of 90 days to complete acquisitions from the time they’ve been notified or face the possibility of having the deal blocked. Oracle can reapply for approval with the antitrust authority, whose rules are said to be stringently enforced.
According to WSJ sources, Oracle’s application withdrawal was a procedural step. It doesn’t necessarily mean that Oracle’s plan to buy Sun is coming apart at the seams. But the deal is nonetheless on shaky ground.
Speaking at a Silicon Valley business forum in late September, Oracle CEO Larry Ellison complained that the European Commission’s antitrust probe is costing Sun $100 million in business each month to rivals such as IBM and HP. Last month, Sun announced plans to lay off up to 3,000 employees or 10% of its workforce, partly as a result of the protracted acquisition. Meanwhile, Sun’s shares were down 16% from Oracle’s $9.50 offer price at $8.18 at the close of trading on The Nasdaq Stock Market on Oct. 30.
European regulators have complained that Oracle has failed to produce evidence to mollify concerns that the deal for Sun, and particularly its MySQL open source database, won’t harm competition. On Oct. 19, three software groups sent a letter to Neelie Kroes, Commissioner for competition for the European Commission asking her to block Oracle’s plans to acquire MySQL from Sun due to anticompetitive reasons.
Some bloggers and pundits believe that the European Commission will eventually approve the Oracle/Sun deal. I think it’s too early to say that with any certainty. Based on what’s been revealed publicly, the EC will, at the very least, likely require Oracle to sell Sun’s MySQL business to satisfy antitrust concerns.
Meanwhile, Sun continues to hemorrhage business…
Only registered users can write comments.
Please login or register. |
