Sun acquisition

Oracle Corporation is to acquire the Santa Clara, California computer company Sun in a deal worth approximately $7.4bn (£5bn).

Oracle president Safra Catz said that he believed that the acquired business would contribute more than $1.5bn to Oracle's operating profit in the first year, increasing to more than $2bn in the second year.

He added: '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.'

There are some obvious advantages to Oracle owning two key Sun software assets: Java and Solaris. Java is one of the computer industry's best-known brands and most widely deployed technologies.

Oracle Fusion Middleware, Oracle's fastest-growing business, is built on top of Sun's Java language and software. Oracle can now ensure continued investment in Java for the benefit of its customers.

Furthermore, the Sun Solaris operating system is the platform for the Oracle database, Oracle's largest business, and has been for a long time. With the acquisition of Sun, Oracle can optimise the Oracle database for some of the unique features of Solaris.

The board of directors of Sun Microsystems has unanimously approved the transaction, which is anticipated to close this summer, subject to Sun stockholder approval, certain regulatory approvals and customary closing conditions.

The Oracle/Sun deal comes after IBM's failed attempt to buy the computer maker.