Oracle, Sun Microsystems deal spurs European Commission investigation

By Lisa Kerner

Charlotte, N.C., Sept. 3 - The European Commission has opened an in-depth investigation into Oracle Corp.'s proposed acquisition of Sun Microsystems, Inc.

Oracle agreed in April to acquire Sun Microsystems for $9.50 cash per share in a deal valued at approximately $7.4 billion including debt.

According to an announcement on Thursday, the commission has until Jan. 19 to make a final decision on whether the merger would "significantly impede effective competition within the European Economic Area or a substantial part of it."

At issue is competition concerns on the market for databases.

"The commission has to examine very carefully the effects on competition in Europe when the world's leading proprietary database company proposes to take over the world's leading open-source database company," competition commissioner Neelie Kroes said in the announcement.

"In particular, the commission has an obligation to ensure that customers would not face reduced choice or higher prices as a result of this takeover."

Oracle, International Business Machines Corp. and Microsoft Corp. control approximately 85% of the database market in terms of revenue, according to the commission.

The U.S. Department of Justice approved the proposed transaction on Aug. 20. Sun stockholders approved the deal in July.

Oracle is a Redwood City, Calif.-based enterprise software company.

Sun is a Santa Clara, Calif., networking computing technologies company.

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