Oracle - Sun Deal Set for Full Investigation in the EU

The software giant doesn't look like it's willing to compromise in order to reach an understanding

By on November 4th, 2009 13:57 GMT
The tension between the EU and Oracle may be mounting, as the Competition Commission is getting ready to release a formal statement of objection to the deal. This is usually the first step towards blocking a deal, but it serves more as a warning rather than a real threat. Oracle has refused to make any concession regarding its acquisition plans for Sun, and EU regulators aren't pleased with the current form of the deal.

According to a report from the Financial Times, the EU seems determined to launch a full-scale investigation of the acquisition. The core of its concerns is the MySQL open source database system, which competes with some of Oracle's own offerings. Considering that the software giant's bread and butter are the various database offerings, the EU is worried that there would be little incentive for it to invest in the free MySQL.

Sun has been greatly affected by the prolonged investigation, with Oracle saying it loses $100 million every month as customers are weary of doing any business while the company's future is still in the air. It also had to cut several thousand jobs, on top of the massive lay-offs already underway at Sun.

Despite all this, Oracle seems unmovable in its determination and has made no concessions to get the deal approved. This stance has even made some speculate that this might even play out in Oracle's advantage. If the deal is blocked by regulators, it would have to remove its offer to buy Sun. In the meantime, Sun has already been greatly affected and Oracle might decide to make a new, slightly different offer at a significantly lower price.

The US Department of Justice approved the acquisition in August after an extended investigation of its own. The EU, though, wasn't convinced and moved to a more thorough investigation, which is set to last until early next year. EU regulators have very rarely outright blocked this type of transactions and have only done so 23 times out of 3,822 investigations since 1994. Furthermore, only two deals have been blocked since 2004.

Comments

Oracle doesn't look like it's willing to compromise in order to reach an understanding with the EU
   Oracle doesn't look like it's willing to compromise in order to reach an understanding with the EU