Explore BrainMass
Share

Oracle and Sun Merger and Acquisitions

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

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.

© BrainMass Inc. brainmass.com October 25, 2018, 3:04 am ad1c9bdddf
https://brainmass.com/business/mergers-and-acquisitions/oracle-and-sun-merger-and-acquisitions-325909

Solution Preview

The 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 ...

Solution Summary

The 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).

$2.19
See Also This Related BrainMass Solution

Oracle-Sun Merger Discussion

Oracle-Sun Merger

Technology giants Oracle recently announced their intention to purchase Sun Microsystems for over seven billionaires. It is not clear if the merger will go through - it still has various regulatory hurdles to cross but perhaps by the time you are completing this assignment the merger will have already gone through (or have been denied by regulators). Regardless, the focus should be on the potential of this largescale merger between Oracle and Sun.

As you know from reading the material in the background materials, mergers can bring about great rewards but also can bring great risks and pitfalls. For this assignment, do some research concerning the arguments both for and against such a merger from a financial perspective. For this module we are not so concerned with how consumers may fair, as this is an issue for the government to consider if they have to approve this merger. Instead you are considering this from the point of view of whether or not such a merger would be a profitable undertaking that would add value to the shareholders of both corporations.

There is a huge amount of articles on this potential merger, but here is one link to get you started:

http://www.sun.com/third-party/global/oracle/

But do not limit yourself to this article. Use Proquest, EbscoWeb, and other sources in the Cyberlibrary. Use various internet search engines such as news.google.com for the latest news on this merger. Look at the webpages for Yahoo and Microsoft. Then write a five page paper answering the following question:

Do you think a merger between Oracle and SUN would add value to the shareholders of both corporations?

In your answer, consider the following issues:

1. The impact on Oracle shareholders

2. The impact on Sun shareholders

3. The financial condition of both corporations

4. Why might Oracle and SUN combined as one company be more profitable than they would if they remain independent?

5. Potential pitfalls - might the combined entity actually be less profitable than either company operating independently?

View Full Posting Details