The antitrust police in Europe say Oracle has offered no concessions in its bid to acquire Sun Microsystems, and they reportedly plan to initiate a process to block the deal.
In what has become a contentious and costly acquisition saga, Oracle’s pursuit of Sun Microsystems may have hit its biggest hurdle yet, as the European Competition Commission appears ready to file an objection to the merger.
According to a report in today’s Financial Times, which cited an unnamed source close to the proceedings, Oracle’s refusal to offer concessions in its bid to swallow Sun has prompted the commission to ready an official statement of objections, which the Times calls “the first step on the path to blocking [the acquisition].”
When contacted by Managing Automation today, the commission declined to comment on the speculation that it would move to block the acquisition.
Oracle offered to buy Sun for $7.4 billion in April, hoping to take over the company’s server business, MySQL open source database technology, the Java programming language, the Solaris operating system, and other technology.
But as of last month, the process appeared to be set on a collision course, as word came from Europe that the competition commission was unsatisfied with Oracle’s cooperation in attempting to resolve antitrust concerns. The commission has revealed a particular interest in Oracle’s plans for the MySQL open source database technology, which offers a lower total cost of ownership alternative to would-be Oracle database customers. Commissioner Neelie Kroes has expressed an interest in seeing the open source option survive and a wariness of Oracle’s plans for it.
The wear and tear of the prolonged takeover effort has shown in Sun’s stock. Just before Oracle announced its $9.50 per share offer in April, Sun stock was trading at less than $7. Soon after, the shares rose above $9 and in late August were trading at the offer mark of $9.50. After news of the commission’s discontent emerged in October, the stock dropped to near $8 and today hovered at around $8.30 a share in afternoon trading, an indication that some investors believe the deal will either fall through or occur at a lowered offering price.
Oracle CEO Larry Ellison maintains that the delay in closing the deal is costing Sun $100 million each month. Oracle is no stranger to lengthy acquisitions, having waged a seesaw battle over the course of two years to buy PeopleSoft, which it finally did in 2004.