Oracle-Sun Merger Discussion
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:
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?