Oracle and Sun Merger and Acquisitions

He merger between Oracle and Sun would definitely add shareholder value to both corporations. Since the merger, profitability has increased 25%, the merger has far exceeded the expectations of the company's shareholders. Collectively, Oracle and Sun's merger offers "customers unmatched benefits, including excellent system availability, scalability, energy efficiency, powerful performance, and low cost of ownership." (Oracle, 2010). The impact of Sun shareholders was a negative one because Sun was de-listed from NASDAQ and stock holders were forced to receive cash payouts via USPS. The merger will allow Oracle to combine resources with Sun thus creating a stronger brand in the competition.

"For Oracle shareholders, the acquisition of Sun gives Oracle key resources for long-term growth. Sun is the world's No. 4 server maker and has a number of the most high quality and recognizable brands in the tech business. Oracle now owns the coveted JAVA programming language, Solaris operating systems, SPARC processors and MySQL database, all of which will strengthen its portfolio of middleware and business applications." (Scott, 2010).

According to Sun's annual report their "market capitalization in 2009 was $3.7 billion at $4.97/share. Revenues increased by about $7 million and the operating income increased by about $63 million over the previous year. United States revenues decreased by about 8% or $443 million. Restructuring charges of about $263 million. The company purchased $151 million shares at average price of $18.30 for a total cost of $2.76 billion under the stock repurchase plan." (Subramanian, 2010).
"The true benefits of the merger may take some time to emerge as Oracle will still have to fully develop many of Sun's assets and then successfully integrate them into its core product lines. With the benefits of the merger factored in, Morningtar projects 14% annual growth through 2014. Analysts have raised their opinion of the stock in recent days, with Bloomberg listing the consensus 12-month target price at $28.60 with a range of $24 to $37." (Scott, 2010).

In addition to combining resources, both companies would become more profitable as a result of maintaining the consumer base from each company. Oracle and Sun prior to the merger established loyal consumers. With such a loyal following, the companies are at an advantage to increase consumer sustainability and double the value of their market share. In my opinion the merger has been proven to be a successful one. ROI will be established for Oracle from now to 2014 as long as they continue to remain competitive and provide consumers with high-quality products with state-of-the-art technological advancements.