EU Could Issue Legal Objection Against Oracle-Sun Deal

Oracle could face legal objection from the European Commission for its proposed $7.4 billion acquisition of Sun Microsystems, the Financial Times reported.

Citing a source close to the process, the FT reported that Oracle has refused to offer any sort of concessions, and as a result, prompting European regulators to issue formal objections over the deal.

The issue has somewhat lent a catch-22 situation for the EU’s outgoing competition commissioner Neelie Kroes, as confronting Oracle for its proposed takeover of Sun could lead to a new period of trans-Atlantic tensions over the laws pertaining to antitrust issues.

On the other hand, allowing Oracle to go on with the merger would exhibit weaknesses in the system, particularly after the commissioner attempted to persuade Oracle’s top executives into making concessions.

The situation therefore has prompted some analysts to speculate that the best possible way for Ms Kroes to deal with situation is to convince Oracle to drop its interest in Sun.

The Commission’s concerns over the proposed acquisition of Sun by Oracle essentially centre on the latter’s takeover of MySQL, a widely popular open source database snapped up by Sun back in 2008.

Incidentally, the Commission last prevented a US merger when it disapproved the planned takeover of Honeywell by General Electric in 2001, and it has only blocked 2 of 1,665 such deals struck between 2004 and 2008, the FT report added.