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Sun Microsystems-IBM fallout: What happens next?

By Amarendra Bhushan for CEOWORLD Magazine Updated:April 7, 2009

This isn’t a good thing for Sun Microsystems Inc., its Shares fell nearly 23 percent (closed at $6.56, down $1.93.) Monday on news that IBM had withdrawn its $7 billion acquisition offer, and Sun is now vulnerable to shareholder lawsuits or changes in top management.

IBM pulled the offer this weekend, and Sun ended IBM’s status as its exclusive negotiating partner. It was unclear whether talks were continuing or whether Sun was trying to find an alternative suitor to IBM.

Without IBM Corp.’s $7 billion takeover offer, Sun Microsystems Inc., is possibly alone again, unless a new suitor somehow emerges. The deal’s collapse raises questions about Sun’s next steps pursuing its solo business models that…..

I continue to think that IBM is one of the few companies that could absorb something the size of Sun and make the deal pay off. There are many companies with the cash – but cash alone isn’t sufficient.

When the talks between Sun and IBM were first reported, Sun’s stock rose 79%. Since then, the company’s stock has declined by about 26%.

IBM is a multinational computer technology and IT consulting corporation. It has been on an acquisition spree since 2002. In the last six years, IBM has spent $9.3 billion on close to 35 software companies. These acquisitions have helped IBM perk up its software sales by 37 percent.

I’m just wondering if Google buying “Sun” is possible. Since servers and Java technologies are essential part of Google products. Google itself has a especial server technology which could be delivered to the market using Sun’s marketshare.

Is it possible?

My biggest worry – Sun gets chopped up and sold off to Patent hoarders, holding companies, etc.

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