Oracle agreed to acquire Sun Microsystems on April 20, 2009, for $9.50 in cash per Sun share. The announced value was about $7.4 billion before accounting for Sun’s cash and debt, and about $5.6 billion after that adjustment. Oracle completed the purchase on January 26, 2010.
How much did Oracle pay for Sun?
The merger agreement set cash consideration at $9.50 for each Sun common share. Oracle described the transaction as worth approximately $7.4 billion gross, or $5.6 billion net of Sun’s cash and debt. Those are two ways of expressing the announced transaction value, not competing purchase prices. Oracle’s April 20, 2009 announcement and its SEC-filed announcement state the terms.
| Measure | Amount | Meaning |
|---|---|---|
| Cash per Sun share | $9.50 | Cash consideration for each Sun common share under the 2009 agreement. |
| Approximate gross transaction value | $7.4 billion | Announced transaction value before deducting Sun’s cash and debt. |
| Approximate net value | $5.6 billion | Announced value after accounting for Sun’s cash and debt. |
Why did Oracle buy Sun?
Oracle described the deal as a way to combine its enterprise software with Sun’s computing systems. Sun brought hardware and systems used for mission-critical computing, as well as Java and other technology assets. Oracle said it intended to continue investing in Java and argued that the acquisition would strengthen its middleware and Fusion applications. Oracle’s announcement set out that strategic case.
Oracle’s expected earnings contribution was a forecast, not a guaranteed outcome: its 2009 announcement projected at least $1.5 billion in acquired-business non-GAAP operating profit in the first year and more than $2 billion in the second year. It also projected at least 15 cents of non-GAAP earnings accretion in the first full year after closing. These were Oracle’s estimates at the time, not reported purchase-price terms.
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When was the acquisition announced, approved and completed?
The transaction moved through several distinct milestones between announcement and closing:
| Date | Milestone |
|---|---|
| April 20, 2009 | Oracle and Sun announced a definitive merger agreement. |
| July 16, 2009 | Sun shareholders approved the merger. |
| August 20, 2009 | The U.S. Department of Justice approved the transaction and the Hart-Scott-Rodino waiting period ended. The contemporaneous notice said other closing conditions, including European Commission clearance, remained. U.S. Department of Justice notice. |
| January 26, 2010 | Oracle completed the acquisition; Sun became a wholly owned Oracle subsidiary. Eligible Sun shares converted into $9.50 cash per share. Oracle’s completion announcement. |
What happened to Sun Microsystems?
Sun did not remain an independent public company after the deal closed. It became a wholly owned subsidiary of Oracle, and the eligible shares were converted to cash under the merger terms. Oracle’s stated strategic plan centered on incorporating Sun’s systems and technology into its enterprise-software business, while continuing investment in Java.
For a Sun shareholder, the practical headline was the agreed cash amount of $9.50 per eligible share, subject to the merger’s terms. The larger $7.4 billion figure described the approximate overall gross transaction value, not the amount an individual shareholder received.
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