Redwood Shores, Calif. Oracle Corp. said Monday that it will acquire Santa Clara, Calif.-based computing-systems provider Sun Microsystems in a cash transaction that is valued at approximately $7.4 billion.
Oracle will acquire Sun common stock for $9.50 per share. The software behemoth estimates that the acquisition will contribute to more than $1.5 billion of Oracle’s adjusted operating profit in the first year, and could account for more than $2 billion in the second year, Safra Catz, Oracle’s president, said in a company statement.
Sun, which is credited with inventing the Java programming language, has struggled to continue operations on its own. The company has lost $13.3 billion in sales over the last four quarters, and $1.9 billion in profits during the same time frame.
IBM originally targeted the company for a takeover, but the deal fizzled when antitrust issues arose due to overlapping services. Oracle, meanwhile, will be able to integrate Sun products to enhance its current offering, according to Oracle’s CEO Larry Ellison.
The deal is expected to close this summer, the statement said.