By Lisa Kerner
Charlotte, N.C., April 20 - Oracle Corp. agreed to acquire Sun Microsystems, Inc. for $9.50 cash per share in a deal valued at approximately $7.4 billion including debt.
Sun's board approved the transaction, which is expected to close this summer.
A $260 million termination fee is included in the agreement, according to a form 8-K filed with the Securities and Exchange Commission.
Oracle said it expects the acquisition to be accretive to its earnings by at least 15 cents on a non-GAAP basis in the first full year after closing.
"We estimate that the acquired business will contribute over $1.5 billion to Oracle's non-GAAP operating profit in the first year, increasing to over $2 billion in the second year," Oracle president Safra Catz said in a news release.
"This would make the Sun acquisition more profitable in per share contribution in the first year than we had planned for the acquisitions of BEA, PeopleSoft and Siebel combined."
Sun chairman Scott McNealy called the combination a "natural evolution" and an "industry-defining event."
The companies have been "industry pioneers and close partners for more than 20 years," McNealy said.
Oracle is a Redwood City, Calif.-based enterprise software company.
Sun is a Santa Clara, Calif., networking computing technologies company.
| Acquirer: | Oracle Corp.
|
| Target: | Sun Microsystems, Inc.
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| Announcement date: | April 20
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| Transaction value: | $7.4 billion
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| Price per share: | $9.50
|
| Termination fee: | $260 million
|
| Expected closing: | Summer of 2009
|
| Stock price of target: | Nasdaq: JAVA: $6.69 on April 17
|
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