IBM’s potential acquisition of Sun collapses

6 Apr 2009

A potential US$7bn acquisition of Sun Microsystems by IBM that would have given Big Blue additional edge in the server market is understood to have collapsed.

The talks were in a final stage of development. However, it emerged over the weekend that Sun terminated IBM’s status as its exclusive negotiating partner, signalling another potential bidder for the Californian server firm.

It is understood that Sun was not happy with the US$9.40 a share or US$7bn offer from IBM and expected more.

According to a report in yesterday’s Wall Street Journal, Sun also felt that the terms and conditions offered by IBM gave the latter too much flexibility to walk away from the negotiating table.

IBM holds a 32pc share of the global server business, while Sun holds a 10.1pc share, according to factory shipments recorded by IDC.

By John Kennedy

Pictured:Sun’s Blade 8000 server