European Commission may delay Sun-Oracle merger

The European Commission could delay its decision on the Sun-Oracle deal beyond Thursday's deadline to further investigate antitrust issues, reported Reuters, citing sources familiar with the situation.

Apprehensive about Oracle gaining control of Sun's widely used MySQL database, the Commission's antitrust regulators are currently debating whether to OK the deal by Thursday, the report said. If the Commission launches a full review, it could take as long as four months before a decision is reached, according to Commission rules.

The U.S. Department of Justice recently cleared the merger. But the Justice Department's concerns centered more on licensing issues with Sun's Java software than MySQL.

The companies announced in April a deal in which Oracle would acquire Sun common stock for $9.50 per share in cash, putting the value of the transaction at about $7.4 billion.

The competition has already taken advantage of the uncertainty over the Sun-Oracle deal. Key players like IBM and Hewlett-Packard have offered discounts and other incentives to lure Sun customers. They've also floated the idea that Oracle may have a tough time trying to manage a hardware manufacturer like Sun.

Sun's worldwide server sales have already been hurt, with the company capturing only 10 percent of the overall server market on sales of just $981 million for the second quarter, a drop of more than 37 percent from the year-ago quarter.

[sanenazok]

This deal was announced in April. What has taken the EU so long to look into the effect on MySQL? That's a bureaucracy for you - look for a way to stay relevant such as by delaying a major deal.

[Renegade Knight]

Here's hoping they kill the merger. Or force it through. I'm tired of waiting.

[DDS03175]

I'm sorry for such a naive question, but how does the EU even have jurisdiction over an American business? Since when does a US entity (business, organization, or individual) need to answer to the EU?

I realize that our economy is global, but if the EU can interfere with US business, why couldn't a country such as North Korea or Iran do the same? Is this because there are employees of Sun and Oracle in these countries, so therefore, they have a claim in jurisdiction, or are they claiming a power that they do not really have, nor should they have?

And before someone claims that this question is ignorant, I am aware of that. I'm asking because I am ignorant and do not wish to be so. I'm hoping someone will be able to point me to resources that explain this to me.

[a3th3r]

The EU has the right to deny the merger because the company does business in Europe. Because the European market is so large a US company would not consider pulling out of Europe over a failed merger, the end cost to the company would be too great. In the case of N. Korea, yes they could interfere but the company could in turn refuse to do business there.

Any company based in the US must also follow all laws and regulations of the other nations when transacting business there, and must follow all US laws regardless of where the transaction takes place.

[DDS03175]

Thank you, a3th3r. That makes sense.

[anthony f wood]

Sun & Oracle have long had a friendly relationship. So when Sun started to get the splintery end of the stick ( financially ) Oracle decided that there's too much good stuff going on at Sun to let it go to waste.
There's Java, MySQL, OpenSolaris ( which I have on one machine, just ask & they will send it), and a whole hardware design ability that allows for manufacture of systems from small servers to supercomputers.
Unfortunately Sun was starting to go down a bit of a slippery slope partly due to the economic climate and the fear of businesses to spend on long term infrastructure.
Oracle is the best group to come to that party as they already work in well together.

I hope approval comes quickly.