EU To Look Into Oracle-Sun $7.4bn Deal

European Union regulators have launched an antitrust investigation into the Oracle’s acquisition of Sun Microsystems, saying that they wanted to ensure Oracle would continue to develop Sun’s rival database Open-source application, MySQL.

EU’s antitrust investigation could seriously jeopardise the $7.4 billion takeover deal, which has already been given the green signal by the US Department of Justice.

The European Commission now has 90 days - until January 19, 2010 - to decide upon whether to clear the takeover deal or block it. Incidentally, the commission often asks companies to introduce changes that ward off antitrust concerns.

Neelie Kroes, the EU Competition Commissioner, said that antitrust officials have been required to scrutinise the impact of a deal “when the world's biggest proprietary database company proposes to take over the world's leading open-source database company”.

She further said the executives wanted to assure that customers won’t have limited choices or hiked prices as a result of the deal, and looked for assurances that open-source software, like MySQL, keeps on competing with large organisations that develop their own proprietary codes.

Along the same line, Kroes added that “Companies are looking for cost-effective IT solutions and systems based on open-source software are increasingly emerging as viable alternatives to proprietary solutions. The Commission has to ensure that such alternatives would continue to be available”.

Our Comments

Sun Microsystems could already lose 10,000 jobs as a result of the acquisition and Oracle needs to make sure that the company doesn't follow the contrived path of HP when it acquired Compaq. Shares of Oracle were down one percent after the news of the probe were released.

Related Links

Oracle faces EU competition inquiry into $7.4bn Sun deal

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EU to Probe Oracle-Sun Deal

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Oracle deal for Sun hits hurdle in Brussels

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EU probes Oracle-Sun deal, cites open-source issue

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European Competition Commission puts Oracle's £5bn Sun Microsystem deal on hold during probe