IBM and Sun are said to be nearing a possible merger, with discussions that IBM will pay US$9.55 a share – $1 less than what Sun previously expected and a revised value at US$7 billion – in return that IBM will fight for the deal even if the regulators object to the plan, according to the Wall Street Journal.
Both companies have a 65 percent share in the high-end Unix server market and, between Sun and IBM, a virtual monopoly on the tape-based storage devices market. Sun currently owns Java and open-source database MySQL, along with OpenOffice.org and the OpenSolaris operating system. IBM, on the other hand, Lotus productivity suite and the Tivoli software brand.
However, though an announcement is soon to be made, the talks could still unravel. The acquisition could also face an antitrust review, which would potentially stop the merger from going ahead.
Sun shares rose 15 cents to US$8.15. However, investors fear that if IBM backs away from the deal, the stock could drop sharply – like Yahoo shares dropped after a potential merger between Microsoft failed as the company rejected the offer last year.